Bank of America Securities acted as sole book runner and sole lead arranger of a new $150 million syndicated secured revolving credit facility for Radiant Logistics. The secured facility replaces an existing $75 million revolving facility and will provide the capacity for Radiant Logistics to fund future acquisitions, capital expenditures or for other corporate purposes, including the repurchase of the company’s common stock.
Bank of Montreal acted as lender and syndication agent. MUFG Union Bank acted as lender and documentation agent. Bank of America, Keybank National Association and Washington Federal Bank, National Association also acted as lenders. Bank of America will serve as administrative agent as well.
Concurrent with entering into new secured facility, Radiant Logistics also amended the term loans held by its Canadian lender, Fiera Private Debt Funds IV and V (formerly known as Integrated Private Debt Funds IV and V), to make the financial and other covenants therein consistent with those contained in the new secured facility. In addition, the security interest securing such term loans were made to be on a parity basis with those assets securing the new secured facility.
“We are very pleased to announce our new $150 million senior facility and appreciate the strong support and confidence of our expanded banking group,” Bohn Crain, founder and CEO of Radiant Logistics, said. “With this new facility, and the modifications to our Canadian facility, we will be able to transition from a facility that limited our borrowings to advances against our accounts receivables, to a more robust cash flow facility that will allow us access to additional low-cost capital and greater financial flexibility as we look to maximize long term shareholder value through a combination of organic growth and strategic acquisitions intended to bring value to our strategic operating partners, shareholders and the end customers that we serve. In addition, with the benefit of our new financing arrangements, we enjoy additional capacity to continue to execute on additional compelling acquisition opportunities while also preserving our ability to pursue other initiatives to unlock shareholder value, including opportunities to buyback our common stock.”
Under the terms of the new secured facility, Radiant Logistics may borrow up to $150 million, subject to compliance with customary and standard financial coverage covenants and ratios. Included within the secured facility is an accordion feature for an additional $50 million to support future acquisition opportunities. Borrowings under the secured facility accrue interest at either the lenders’ base rate plus 1.00% or LIBOR plus 2.00%, and can be subsequently adjusted based on Radiant Logistics’ consolidated leverage ratio, at either the lenders’ base rate plus 1.00% to 1.75% or LIBOR plus 2.00% to 2.75%.
The secured facility carries a five-year term and is secured by accounts receivable and other assets of Radiant Logistics and its subsidiaries. For general borrowings under the secured facility, Radiant Logistics is subject to a maximum consolidated leverage ratio of 3.00x and a minimum consolidated fixed charge coverage ratio of 1.25x. Additional minimum availability requirements and financial covenants apply in the event Radiant seeks to use advances under the secured facility to pursue acquisitions or repurchase its common stock. Under the terms of the secured facility, as of December 31, 2019, Radiant had a consolidated leverage ratio of 1.0x and a consolidated fixed charge coverage ratio of 3.6x.
“The COVID-19 virus is likely to continue to create a lot of stress on supply chains and the financial markets well into 2020. We are fortunate to have de-levered our business with proceeds from an equity raise back in 2015, and unlike many of our peers, we have continued to use our free cash flow to pay-down debt and strengthen our balance sheet,” Crain said. “Our new facility gives us the financial flexibility to successfully navigate these markets while providing the financial stability to confidently support our operating partners and the end customers that we serve. We also believe that as customers consider the underlying financial health of their current supply chain partners, Radiant may represent an attractive alternative.”
Radiant Logistics is a third-party logistics and multimodal transportation services company which provides domestic and international freight forwarding services, truck and rail brokerage services and other supply chain management services, including customs brokerage, order fulfillment, inventory management and warehousing.