DXP acquires four of the pumping distributors and obtains a loan of 300 million dollars
HOUSTON – DXP Companies announced Monday that it has completed the acquisitions of Total Equipment Company (TEC), APO Pumps & Compressors, including Corporate Equipment Company (together APO / CEC) and Pumping Solutions, Inc. (PSI). Financial terms of the transactions were not disclosed. DXP financed the acquisitions with cash on the balance sheet.
“We are delighted to announce these acquisitions as each company provides DXP with exceptional management teams that enhance our ability to collaborate and serve our customers, suppliers and other stakeholders,” said David Little, President and CEO of DXP Enterprises. “Total Equipment and APO improve our after-sales and service capabilities while continuing our efforts to diversify the end market. Pumping Solutions and CEC provide DXP with a growing and deeper presence in the water and wastewater market as well as other commercial and industrial end markets.
“We believe that these acquisitions offer a reproducible and sustainable profit profile that is complementary to our business and consistent with our strategy. We welcome the employees of these companies into the DXP family. These acquisitions provide great opportunities for DXP and provide new opportunities for our suppliers, customers and employees to grow with us in the future. “
The final agreements were signed on December 31, 2020. Revenue and Adjusted EBITDA were approximately $ 114 million and $ 16 million, respectively, for the eleven months ended November 30, 2020. The Adjusted EBITDA was calculated as profit before tax plus depreciation and amortization. , and non-recurring items.
Kent Yee, Chief Financial Officer, added, “We continue to execute on our strategic priorities and our strategy of making acquisitions in markets and business models where we can continue to improve DXP. In today’s market, we have not only been able to achieve our goals, but also do so on favorable terms. We add over 269 talented employees to the DXP team and look forward to our growth together. Combined, these acquisitions complement DXP while diversifying our products, services and final exposure. We expect this set of transactions will reduce our exposure to oil and gas by 200 to 400 basis points while adding strong recurring revenues fueled by significant secondary market and service capabilities. Additionally, we are adding scale to key end markets such as water and wastewater, chemicals, and food and beverage. We expect these acquisitions to have an accretive effect on earnings. “
DXP was # 16 on Industrial distribution‘s List of the top 50 2020.
$ 300 million loan guaranteed
DXP Enterprises, Inc. announced on December 23 that it had entered into a new $ 330 million Senior B Secured Term Loan (TLB). The TLB expires on December 23, 2027.
DXP intends to use the proceeds to repay the existing B term loan, which will be terminated upon this payment; and the remainder for general business purposes, potential acquisitions, and transaction fees and expenses. The transaction gives DXP operational and financial flexibility to reinvest in the business and pursue its strategy of organic growth and targeted acquisitions.
The B term loan is valued at 4.75% above LIBOR and includes a secured debt clause ranging from 5.75: 1 to 4.75: 1. The new loan under the credit agreement is secured by the consolidated assets of the company.
David R. Little, Chairman of the Board and Chief Executive Officer, said: “We are delighted with the successful execution of this refinancing and our efforts to maintain the price of our existing debt while improving the terms of our existing facility. . We will build on this positive momentum and end the year strong and look to drive growth in 2021. The successful closure of this new term loan following the disruption caused by COVID-19 demonstrates the confidence lenders have in our plans. current and long term. “
Kent Yee, Chief Financial Officer, added: “We are delighted to announce the completion of this refinancing, which has achieved several important objectives, including extending our debt maturities and improving our strong position. liquidity with a more flexible balance sheet and improved key conditions. DXP is well positioned to support its strategy of disciplined long-term growth. We have seen strong market interest and demand for this transaction, demonstrating the confidence that existing and new lenders, investors and other financial participants have in DXP. We appreciate the support of our advisors and our group of lenders. Based on the closing of the transaction at the end of the third quarter, DXP’s net debt to EBITDA was 2.6: 1 “
Additional details regarding the TLB will be available in DXP’s current report on Form 8-K to be filed with the Securities and Exchange Commission by December 31.st.
DXP Enterprises is a distributor of products and services that adds value and total cost savings solutions to industrial customers in the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services. DXP’s portfolio of MROP products and service solutions enables DXP to be flexible and customer-focused, creating competitive advantages for our customers. DXP’s business lines include service centers, innovative pumping solutions and supply chain services. For more information, visit www.dxpe.com.