DXP Enterprises, Inc. Announces Closing of New Term Loan B

Rhea-AI Summary

DXP Enterprises, Inc. (NASDAQ: DXPE) has closed a $330 million Senior Secured Term Loan B, maturing on December 23, 2027. The funds will repay the existing Term Loan B and support general corporate purposes, including potential acquisitions. The new loan is secured by the company's consolidated assets and priced at 4.75% over LIBOR, featuring leverage covenants ranging from 5.75:1 to 4.75:1. The refinancing enhances DXP's financial flexibility and liquidity, allowing for continued growth. Net debt to EBITDA stands at 2.6:1 following this transaction.

Positive

• Successfully closed $330 million TLB, improving financial flexibility.
• Refinancing lowers debt pricing, enhancing liquidity and balance sheet flexibility.
• Net debt to EBITDA is a manageable 2.6:1, indicating healthy financial leverage.

Negative

• None.

DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it has closed on a new $330 million Senior Secured Term Loan B (“TLB”). The TLB matures on December 23, 2027.

DXP intends to use the proceeds to repay the existing Term Loan B, which will be terminated on that payment; and the remaining for general corporate purposes, potential acquisitions and transaction fees and expenses. The transaction provides DXP with operational and financial flexibility to reinvest in the business and pursue its strategy around organic and targeted acquisition growth.

The Term Loan B is priced at 4.75% over LIBOR and includes a secured leverage covenant ranging from 5.75:1 to 4.75:1. The new loan under the credit agreement is secured by the company’s consolidated assets.

David R. Little, Chairman and CEO remarked, “We are pleased with the successful execution of this refinancing and our efforts to maintain our existing debt pricing while improving the terms from our existing facility. We will take this positive momentum and close out the year strong and look to drive growth in 2021. The successful closing of this new term loan following the disruptions caused by COVID-19 demonstrates the confidence lenders have in our current and long-term plans.”

Kent Yee, CFO added, “We are pleased to announce the completion of this refinancing, which accomplished several important objectives, including extending our debt maturities and further enhancing our strong liquidity position with a more flexible balance sheet and improving key terms. DXP is well-positioned to support its disciplined growth strategy well into the future. We experienced 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 from our advisors and lender group. Based on the transaction closing at the end of the third quarter, DXP’s net debt to EBITDA was 2.6:1”

Additional detail 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.

About DXP Enterprises, Inc.

DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.

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FAQ

What is the purpose of DXPE's new $330 million loan?

The loan will repay the existing Term Loan B, support general corporate purposes, and facilitate potential acquisitions.

What are the terms of DXP Enterprises' new Senior Secured Term Loan B?

The loan is priced at 4.75% over LIBOR and matures on December 23, 2027, with leverage covenants ranging from 5.75:1 to 4.75:1.

How does the new loan affect DXP's financial situation?

The refinancing improves DXP's financial flexibility and liquidity, allowing for continued investment in growth.

What was DXP's net debt to EBITDA ratio after the loan closing?

DXP's net debt to EBITDA ratio stands at 2.6:1 after the transaction.

When will more details about the TLB be available?

Additional details regarding the TLB will be filed in DXP's Current Report on Form 8-K by December 31.