Hawkins closed on an amended and restated credit agreement in the form of a $150 million senior secured revolving credit facility, replacing its current term loan and revolving credit facilities, and providing greater capital management flexibility at lower interest rates.
According to a related 8-K filing, U.S. Bank served as administrative agent, sole lead arranger and sole book runner on the transaction. JP Morgan Chase Bank joined U.S. Bank as a lender on the revolver.
The new agreement is for a period of five years, extending the term of its current agreement by three years, and included a $5 million letter of credit subfacility and $15 million swingline subfacility.
In addition to paying off its previous credit facilities, the Company expects to use funds borrowed under the new agreement to fund capital expenditures, general working capital needs, acquisitions and repurchases of its own stock.
Borrowings under the revolver bear interest at a rate per annum equal to one of the following, plus an applicable margin based upon Hawkins’ leverage ratio: LIBOR for an interest period of one, two, three or six months as selected by Hawkins, reset at the end of the selected interest period, or a base rate determined by reference to the highest of U.S. Bank’s prime rate, the Federal Funds Effective Rate plus 0.5%, or one-month LIBOR for U.S. dollars plus 1.0%.
The LIBOR margin is between 0.85% and 1.35%, while the base rate margin is between 0.00% and 0.35%, both depending on the company’s leverage ratio.
Headquartered in Roseville, MN, Hawkins distributes, blends and manufactures chemicals and other specialty ingredients for its customers in a wide variety of industries. It has 41 facilities in 19 states.