Capital One served as the sole bookrunner, joint lead arranger and administrative agent for a $290 million senior secured credit facility for Interface Security Systems in connection with a recapitalization of the business by Prudential Capital Partners and SunTx Capital Partners.
The facility consists of a $230 million senior term loan and a $60 million revolving line of credit. The funding will enable the company to refinance existing debt and provide capital to execute its growth strategy.
Interface, headquartered in St. Louis and Plano, TX, provides a comprehensive bundle of monitored, mission-critical managed network, physical security and business intelligence services to large multi-location businesses over a private PCI-compliant cloud-based network.
As part of the $600 million refinancing, the company’s existing debt, including the $50 million Capital One revolving credit facility, the $230 million senior secured notes due 2018 and the $115 million senior contingent cash pay notes due 2018, have been redeemed in full. The $67 million PIK senior notes due 2019 have been exchanged for new PIK senior notes due 2023.
Prudential Capital Partners will be providing $100 million of senior subordinated notes.
Michael Shaw, CEO of Interface Security Systems, said, “Moving forward now with a stronger balance sheet and improved cash flows, the company will focus on increasing our sales and marketing initiatives, expansion into new vertical markets, investment in new technologies and development of additional managed services that will enable us to provide an even broader range of mission critical cloud-based bundled services to both our existing customers and new clients.”
Robert Derrick, managing director and partner with Prudential Capital Partners, said, “With the support of SunTx, Interface Security Systems has developed a very impressive bundle of IP managed services to which their customers have reacted very positively. We are pleased to be a partner in a new capital structure that will provide Interface with the ability to continue to grow and provide value to their customers.”
Imperial Capital acted as financial advisor to Interface, and Akin Gump Strauss Hauer & Feld served as legal counsel for Interface. Schiff Hardin served as legal counsel for Prudential Capital Partners. Buchanan Ingersoll & Rooney served as legal counsel for the lenders. Wilmer Cutler Pickering Hale and Dorr served as legal counsel for the bondholders.
SunTx Capital Partners, is a Dallas-based private equity firm that invests in middle market manufacturing, distribution and service companies.
Prudential Capital Partners is the middle market mezzanine fund business of Prudential Capital Group, the private capital investment arm of PGIM.