The Middleby Corporation has commenced a set of strategic financing transactions, including an amendment to its senior credit facility and the launch of a $550 million convertible notes offering.
The company also expects to enter into a related capped call hedge transaction, which will offset potential dilution from the conversion feature of the notes.
“Consummation of these strategic transactions will enhance our capital structure and provide greater financial flexibility as we lead our business into the future,” said Middleby CEO Tim Fitzgerald.
“Most importantly, these actions reinforce continued investment in our operating and strategic initiatives supporting long-term growth objectives.”
The amended credit agreement will provide for a senior secured credit facility in an aggregate principal amount of $3.1 billion, consisting of a $2.75 billion multi-currency revolving credit facility and a $350 million term loan facility (after giving effect to the $400 million prepayment upon effectiveness of the amendment).
The maturity date remains unchanged at January 31, 2025.
The threshold leverage ratio restricting the incurrence of debt has been increased to 5.50 to 1.00 from 4.00 to 1.00 through the maturity of the facility.
The borrowing cost under the senior credit facility remains unchanged by the amendment at total net debt leverage ratios of below 4.00 to 1.00.
Pricing at newly established leverage tiers above 4.00 times increase to a maximum of LIBOR plus 250 basis points at the highest allowable borrowing levels.