EXETER, Pa. — Keystone Automotive Operations has reached agreement with affiliates of Platinum Equity LLC and Littlejohn & Co., the majority holders of more than 64 percent of its Senior Subordinated Notes due 2013, on the terms of a recapitalization transaction.
According to Keystone, consummation of the transaction would reduce Keystone’s and its parent company’s outstanding indebtedness by approximately $295 million and enhance its ability to compete in the aftermarket industry.
"We are very pleased to have reached agreement with the majority holders on the terms of a recapitalization that will reduce debt, strengthen our balance sheet and better position us for future growth opportunities and long-term success," said Ed Orzetti, Keystone president and CEO. "We look forward to continuing to offer our customers and suppliers the most comprehensive inventory selection in our industry, the highest levels of customer service and innovative marketing support."
Under the terms of the transaction, Keystone’s existing $175 million Senior Subordinated Notes would be converted into new equity. As part of the agreement, the majority holders have agreed to backstop a $60 million rights offering and Bank of America, N.A. has committed to provide a new asset-based revolving credit facility.
Goldman Sachs Lending Partners LLC has been engaged to arrange a new $120 million first lien senior secured term loan. The proceeds of the rights offering, the new ABL loan and the new term loan in addition to cash on hand, would be used to repay the company’s existing ABL revolving credit facility and senior secured term loan facility. Keystone added that the transaction provides for all trade suppliers to continue to be paid in full for all goods and services provided to the company.
Upon the closing of the transaction, the company is projected to have at least $55 million of total liquidity.
As of Jan. 1, Keystone had approximately $44 million in cash on hand to support its business operations, which are expected to continue uninterrupted. The deal is anticipated to be complete in the first half of 2011.
