Apex Tool banks extra short-term liquidity with Bain revolver, discloses flash numbers for 4Q20 and FY20

Apex Tool Group recently entered into a new USD 30m L+550bps PIK revolver due 31 March 2022 with sponsor Bain, according to two sources familiar with the situation. 

The hand and power tool manufacturer’s management team also informed investors this month that it estimates 2020 net sales of USD 1.2bn, compared to USD 1.35bn in 2019, the sources continued. Adjusted EBITDA for 2020 is expected to come in between USD 185m and USD 190m, compared to USD 214m in 2019. 

Full 4Q20 and 2020 results are expected to come out within the next month, the sources said. 

The company’s capital structure includes a USD 847m first lien term loan, USD 325m of senior unsecured notes and revolver borrowings. 

As of 2 October, total leverage stood at roughly 4.6x through USD 969m in first lien debt and 6.2x based through USD 1.29bn of total debt, given USD 209.6m of LTM adjusted EBITDA, as reported. Liquidity totaled USD 88.6m as of 2 October considering USD 59.7m of cash and USD 28.9m available on a revolver maturing in 2024. 

The borrower’s USD 325m 9% senior unsecured notes due 2023 last traded in size on 22 March at 100.125 to yield 8.917%, up from trades in the 99.5 context to yield 9.281% before the disclosure in early March, according to MarketAxess. This compares to trades at 93 to yield 12.6% in November and trades at 80 in August. 

Apex’s USD 847m L+550bp (1.25% floor) first lien term loan due 2024 is quoted 99.761/100.386, compared to trades at 98.654/99.615 at the end of December, according to Markit. 

Bain acquired Apex in 2013 for USD 1.55bn from joint venture partners Danaher Corp and Cooper Industries, with the backing of USD 1.285bn in debt financing. In August 2019, the borrower completed an amend-and-extend transaction of its TLB and revolver in exchange for a 50bps fee and a margin increase. The effort followed a loan extension and USD 125m add-on in February 2018.

Bain declined to comment. Apex Tool did not respond to a request for comment. 

2021 Debtwire

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