IPC Systems entered into a transaction support agreement with its key stakeholders that will reduce the company’s debt by more than $400 million, extend its debt maturity schedule by five years and provide new capital of $125 million to deliver resources for investment in long-term growth strategies.
“The balance sheet enhancements we are announcing today will allow us to continue building a robust future for IPC and strengthen our partnership with employees, customers, suppliers and other strategic relationships,” Bob Santella, CEO of IPC Systems, said. “I am especially excited about accelerating our efforts to provide our customers with new, innovative solutions for their mission-critical challenges through both organic and inorganic actions in the months and years ahead. We are also encouraged and thankful to have the support of our shareholders and lenders, which reflects their high level of confidence in us.”
The parties to the agreement include: funds managed by Strategic Value Partners and its affiliates (SVPGlobal), a lender that, as a result of this transaction, will become a substantial equity sponsor and equity holder; affiliates of Centerbridge Partners, the IPC Systems’ existing private equity sponsor, which will continue to be a significant equity holder; and certain of its current senior lenders, including HPS Investment Partners. HPS will continue to be IPC’s primary lender and will lead a single group of lenders in a new and streamlined debt structure.
“We strongly believe that, as the result of the agreement reached today, IPC will maintain its position as a global communications and networking solutions leader over the long term,” Victor Khosla, founder and chief investment officer of SVPGlobal, said. “We are excited about renewing our partnership with IPC, and, in our more active role, look forward to supporting management as they continue to provide the first-in-class services for which they are known.”
“IPC has an excellent track record of delivering innovative solutions to the world’s leading financial institutions, and Bob has done a tremendous job leading the company since he joined in 2018,” Jared Hendricks, senior managing director at Centerbridge Partners, said. “We look forward to continuing to support IPC, Bob and his management team in their next phase of innovation and growth.”
“At IPC, we pride ourselves on helping our clients anticipate change and solve problems, and this is equally true for how we manage our multi-award-winning business,” Santella said. “For nearly 50 years, we have evolved and adapted to grow and better serve our clients in a dynamic and changing industry. The actions we are announcing today will give the company the financial foundation to continue setting the standard with industry expertise, exceptional service and comprehensive technology solutions for many years to come.
“We are grateful to our employees for their continued hard work and dedication to IPC’s clients throughout this process. We also thank our customers, suppliers and other business partners for their support as we focused on aligning IPC’s financial structure for long-term success.”
IPC Systems’ professional advisors included Kirkland & Ellis and Evercore.