Compass Diversified, an owner of middle market businesses, entered into a first incremental facility amendment to its existing credit agreement with Bank of America as administrative agent for the lenders party thereto.
The amendment modifies the company’s third amended and restated credit agreement, dated as of July 12, 2022, as amended, among the company, the lenders, the administrative agent and the other financial institutions party thereto, to provide for an additional advance of the term loan in the aggregate amount of $200 million on the date of the amendment and delayed draw term loan commitments in the aggregate amount of $100 million, which may be reduced or terminated by the company upon five business days’ notice and pursuant to which the company may make no more than two draws by July 9, 2025.
The proceeds from the incremental term loan and the incremental delayed draw term loan will be used for new acquisitions, working capital, capital expenditures and other general corporate purposes. The incremental term loan, along with the existing term loan under the credit agreement, will require quarterly repayments of principal amount ranging from $3.75 million to $11.25 million, commencing March 31, 2025, with a final payment of principal and interest due on July 12, 2027.
Commencing on the first quarter ending after the earlier of (i) the date incremental delayed draw term loan is fully drawn and (ii) the end of the availability period, the company will be required to make quarterly repayments of principal amount ranging from 0.625% to 1.875% of the drawn incremental delayed draw term loan (which amounts will be reduced by certain prepayment, if any), unless such loan is accelerated sooner. The amendment contains customary representations and warranties. All other material terms and conditions of the credit agreement were unchanged.
