KMG, a global provider of specialty chemicals, acquired Flowchem, a manufacturer of pipeline performance products, from Arsenal Capital Partners for a purchase price of $495 million in cash, including working capital of approximately $15.5 million.
KeyBank acted as agent and KeyBanc Capital Markets, HSBC Securities (USA) and JPMorgan Chase Bank acted as joint lead arrangers and bookrunners for the loan commitment totaling $600 million, which include a syndicated term loan of $550 million and a revolving credit facility of $50 million.
The term loan and revolving credit facility bear interest at varying rates of LIBOR plus a margin based on net funded debt to EBITDA. As of June 15, 2017, KMG’s outstanding borrowings on the term loan are $550 million, bearing interest at LIBOR + 4.25%.
“We’re pleased to announce the completion of this strategic acquisition and we welcome Flowchem’s dedicated and talented team to KMG,” said Chris Fraser, KMG’s chairman and CEO. “Flowchem is a unique asset that enables KMG to further expand and strengthen our growth platform serving the global pipeline and energy services market.”