EXETER, Pa. (Jan. 11, 2011) — Keystone Automotive Operations Inc. has reached an agreement on terms of recapitalization with affiliates of Platinum Equity L.L.C. and Littlejohn & Co. L.L.C. — a move that is expected to reduce Keystone's outstanding debt and enhance its ability to compete in the automotive aftermarket.
The Platinum Equity and Littlejohn affiliates are majority holders in Keystone, holding more than 64 percent of its senior subordinated notes due 2013.
Upon consummation, which is expected to take place in the year's first half, the agreement would reduce the outstanding indebtedness of Keystone and its parent company by about $295 million.
Under the terms of the transaction, Keystone's existing $175 million senior subordinated notes would be converted into new equity, the company said. The majority holders have agreed to backstop a $60 million rights offering, while Bank of America N.A. has committed to provide an asset-based revolving credit facility.
As part of the deal, Goldman Sachs Lending Partners L.L.C. will arrange a $120 million first lien senior secured term loan.
Proceeds from the rights offering, the new asset-based lending (ABL) loan and the new term loan, along with cash on hand, will be used to repay Keystone's existing ABL loan and senior secured term loan facility.
Upon the closing of the transaction, Keystone is projected to have at least $55 million in total liquidity, it said.
The Exeter-based company and its affiliates are wholesale distributors and retailers of aftermarket automotive accessories and equipment.