NCI Building Systems Inc. (NCS) reported that holders of more than 99% of the aggregate principal amount of its outstanding 2.125% Convertible Senior Subordinated Notes due 2024 have delivered valid tenders. This exceeds the threshold of 95% minimum condition to the offer.
NCS has obtained or expects shortly to obtain the consent of lenders representing 100% of its secured debt for the refinancing of its existing credit facility. Full consent is a requirement for the completion of the company’s investment agreement with Clayton, Dubilier & Rice Fund VIII, L.P. (“the CD&R Fund”).
Earlier, on Oct 9, NCS announced that it had finalized with its lenders terms for a $125 million asset-based revolving credit facility with an additional $50 million accordion feature, and that the company had confirmed participation from lenders for the full availability under the facility. The asset-based revolving credit facility, which has the same maturity as the company’s term loan, had been one of the conditions for the closing of the investment agreement.
NCS had entered into a definitive agreement with the CD&R Fund in August, under which the CD&R Fund will invest $250 million in the company by purchasing newly issued convertible participating preferred shares.
Completion of this transaction was subject to a number of conditions, including the completion of an exchange offer for the company’s existing convertible notes; completion of the refinancing of the company’s existing senior secured credit facility; entry into a new asset-based revolving credit facility; and other customary closing conditions. Now, with the achievement of the major milestones for the completion of the agreement, the company expects to close the transaction by Oct 20.
Upon its completion, this agreement will not only reduce the company’s debt significantly but will also provide it with the necessary resources for future growth.
Texas-based NCS is one of the largest integrated manufacturers of metal products for the North American non-residential construction industry.
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