Daily News: August 2, 2019

PNC Upsizes ALJ Regional Holdings Credit Facility


ALJ Regional Holdings acquired Realtime Digital Innovations, closed an equity private placement and amended its credit agreement with PNC Bank as administrative agent.

ALJ entered into the fifth amendment to the financing agreement dated August 14, 2015 by and among the company, and its subsidiaries, each listed as a “guarantor” on the signature pages. Cerberus served as collateral agent for the lenders, and PNC Bank was administrative agent. The fifth amendment supports the continued growth of the company and the associated increase in cash capital expenditures for Faneuil’s buildout of three new customer call centers to support anticipated increased contract awards.

The fifth amendment included, among other amendments, the following:

The creation of a seasonal revolver facility with $7.5 million in availability;

  • An increase in the size of the capital expenditure basket allocated for the buildout of three new customer call centers at Faneuil from $15.0 million to $18.5 million;
  • An increase in the leverage ratio threshold from 3.50:1.00 to 3.75:1.00 for the fiscal quarters ended September 30, 2019 and December 31, 2019
  • Updates to certain definitions, representations and warranties to allow for the acquisition

In addition, ALJ’s Executive Chairman, Jess Ravich, wii step down from this role and assume full-time responsibilities as the company’s chief executive officer. Ravich will continue to serve as the company’s chairman of the board.

ALJ is a holding company, whose primary assets are its subsidiaries Faneuil, Floors-N-More, d/b/a Carpets N’ More and Phoenix Color. Faneuil is a provider of outsourcing and co-sourced services to both commercial and government entities in the healthcare, utility, retail, toll and transportation industries. Carpets is a floor covering retailer in Las Vegas, Nevada, and a provider of multiple products for the commercial, retail and home builder markets including all types of flooring, countertops, and cabinets. Phoenix is a manufacturer of book components, educational materials and related products producing value-added components, heavily illustrated books and specialty commercial products using a broad spectrum of materials and decorative technologies.

ALJ has acquired RDI, an exclusive partner of Faneuil for the past 18 months providing workflow automation and business intelligence services. The acquisition, effective immediately, is expected to provide Faneuil with a sustainable competitive advantage in the business process outsourcing