Sept. 1 (Bloomberg) -- Insituform Technologies Inc., the provider of infrastructure services including protecting pipelines from corrosion, obtained $500 million in loans to support its acquisition of Fyfe Group LLC.
The financing includes a $250 million revolving credit line and a $250 million term loan, both due in five years, the company said today in a statement distributed by Business Wire.
JPMorgan Chase & Co. and Bank of America Corp. arranged the loan, which pays 1.5 percentage points to 2.5 percentage points more than the London interbank offered rate, depending upon leverage, the company said. Libor is a rate banks charge to lend to each other. Leverage is debt to earnings before interest, taxes, depreciation and amortization.
“This new credit facility also is an important step in our efforts to optimize the company’s balance sheet and achieve an appropriate level of return for our stockholders,” Chief Financial Officer David Martin said in the statement.
In July, the St. Louis-based company said it was acquiring the North American business of Fyfe Group for $115.8 million. The acquisition closed yesterday.
Proceeds of the financing also repay $52.5 million of loans and redeems $65 million of bonds due in April 2013, the company said. Under the terms of the agreement, either the revolver or the term loan may be increased by as much as $125 million, according to the statement.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
--Editors: Chapin Wright, Faris Khan
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