Transcat, a company in test measurement, control and calibration, closed a new five-year $150 million secured credit facility with a syndicate led by Manufacturers and Traders Trust Company (M&T), a superregional bank known for its commitment to fostering economic growth, and includes additional lenders Wells Fargo Bank and Bank of America, replacing the existing $80 million credit facility with M&T which has been terminated.
The new credit facility includes a $150 million revolving credit facility. Borrowing options under the credit facility include a revolving loan option, a swingline loan option and letters of credit, each of which is provided on a committed basis, and now permits a temporary increase to the leverage ratio covenant in the event of a material permitted acquisition. Any base rate loan or swingline loan under the credit facility will bear interest at the base rate plus the applicable margin. Any SOFR loan will bear interest at the daily simple SOFR rate plus the applicable margin. Borrowings under the credit facility may be used to refinance the replaced facility, for permitted acquisitions, and to provide for working capital and general corporate purposes.
“M&T has been a long-term and reliable financing partner to help increase our borrowing power and access to capital, and we are very pleased to now have two additional top-tier lenders, Wells Fargo and Bank of America, take part in this credit facility,” Tom Barbato, chief financial officer of Transcat, said. “This facility has been used to repay our existing credit facility with M&T, and along with our existing free cash flow, is intended to help meet our anticipated capital resources needs to fund future strategic acquisitions and support other internal initiatives, all focused on meeting the demands of our aggressive growth trajectory for the foreseeable future.”
“The level of interest from the various banks was a testament to Transcat’s long-term, proven track record of growth and enhanced profitability,” Barbato said. “The terms and options of the new facility provide greater financial flexibility to invest in internal initiatives and support our next phase of planned business acquisitions. This marks another important milestone for our company as we continue to deliver on our strategic growth objectives and strive to create sustainable, long-term value for our shareholders. We appreciate the strong support and confidence provided by M&T, Wells Fargo, and Bank of America.”
“M&T Bank is proud to support Transcat as they pursue accelerated growth, expand their reach and continue to meet urgent industry needs for mission-critical, accredited calibration services and equipment,” Steve Epping, Rochester regional president and executive vice president for commercial banking at M&T Bank, said. “We are honored to serve as a trusted partner and contribute to this next chapter of Transcat’s journey.”
M&T and Wells Fargo are joint lead arrangers and joint bookrunners.
