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IDQ Holdings sets $210M high yield bond deal backing debt repay, dividend

IDQ Holdings is lining up a $210 million bond deal to fund debt repayment as well as a distribution to shareholders, according to sources. Pricing is slated for midweek through sole bookrunner Jefferies. The secured notes offering will have a five-year maturity, with a non-callable period of 2.5 years, sources say. Issuance is coming under Rule 144A, without registration rights, and accounts are being told to expect a rating profile of B/B3.

Garland, Texas-based IDQ sells air-conditioning maintenance-and-repair solutions for the do-it-yourself automotive aftermarket in North America. Castle Harlan bought the company in 2010 from Arsenal Capital Partners for roughly $170 million.

Financing backing the transaction included a $105 million senior secured loan, priced at L+525, with a 2% LIBOR floor, according to sources. The deal was structured as a $35 million revolver and a $70 million term loan that was issued at 98.5. In addition to the bank debt, Castle Harlan lined up $25 million of mezzanine financing while equity accounted for about 36% of the capital structure. – Jon Hemingway

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