Guggenheim Securities served as financial advisor to Form Technologies, a global group of precision component manufacturers, in the company’s TSA which intends to eliminate $240 million of funded debt and extend the maturity of its revolving credit facility term loan.
Kirkland & Ellis is serving as legal counsel to the company.
Form Technologies entered the TSA with certain of its stakeholders. The company intends to (i) extend the maturities of the existing $100 million revolving credit facility and first lien term loan to April 2025 and July 2025, respectively, (ii) purchase the existing second lien term loan, which combined with a paydown of the first lien term loan would eliminate approximately $240 million of funded debt, and (iii) pay down a significant portion of the outstanding revolving credit facility balance.
The transaction is anticipated to reduce approximately $300 million of debt. The transaction will be facilitated by a $300 million investment in new preferred equity from the company’s existing shareholders and a consortium of investors, including funds managed by the private equity group and credit group of Ares Management.
“This recapitalization is a significant milestone for Form Technologies and provides the runway that will enable the company to execute our strategic growth plan. These transactions demonstrate the strong support and continued confidence of our key stakeholders. In addition, the recapitalization deleverages our balance sheet and improves the company’s liquidity position by eliminating approximately $240 million of debt. Importantly, as part of the recapitalization, our existing shareholders and others are investing $300 million of equity, demonstrating their strong belief in the business. The combination of our enhanced capital structure and the boost to our liquidity position will help enable us to make strategic investments across the business, execute on our profitable growth initiatives and, most importantly, continue to provide the precision engineered solutions to meet our customers’ needs,” Keith Weidman, CEO of Form, said.
The company obtained support for the transaction from all of its revolving lenders, lenders representing more than 70% of the company’s first lien term loan, and lenders representing nearly 85% of the company’s second lien term loan. The closing of the transactions is conditioned on the satisfaction or waiver of certain conditions precedent, including finalizing all definitive documents and achieving certain participation thresholds which may be modified by the company and the consenting lenders.
