KPS recaps manufacturer on $465m

The mid-market turnaround firm has completed a $465m recapitalization of Global Brass and Copper, $102m of which will be used to fund a cash distribution to investors.

KPS Capital Partners has recapitalised its portfolio company Global Brass and Copper (GBC) for $465 million, collecting $102 in cash distributions for investors. 
 
The capital came in the form of a $150 million asset-based credit revolving facility and a $315 million term loan. KPS and GBC will continue to own 100 percent of GBC’s common stock.

Financing for the recapitalisation was provided by a group of banks and institutional investors, with Wells Fargo Capital Finance and GE Capital Markets acting as joint lead arrangers on the $150 million asset-based credit revolving facility. Goldman Sachs lending partners arranged and worked as sole bookrunner on the $315 million term loan. 
 
Proceeds from the financing are being used to refinance outstanding debt, fund the $102 cash distribution to stockholders and fund the company’s growth. Since KPS' acquisition of GBC in early 2008, the company has distributed more than $200 million to shareholders, a source familiar with the matter told PEO. 

Pail, Weiss Rifkind, Wharton and Garrison served as legal counsel to GBC.

Last month, KPS acquired Independent Breweries United, adding to the firm’s North American Breweries platform that invests in the beer and malt beverage industries. KPS is currently investing from its third fund, which totals $2 billion. The firm closed Fund III in 2007 on $1.2 billion, but reopened fundraising for existing investors, eventually closing on an additional $800 million.

In March, KPS recapitalized two portfolio companies – auto-parts supplier HHI and Attends Healthcare – for nearly $400 million, collecting about $210 million in cash distributions for investors.

In the first quarter of 2010, KPS distributed a total of $260 million, a source told PEO.  The firm’s Special Situations funds include a number of private equity funds with over $2.6 billion of committed capital, focused on constructive investing in restructurings, turnarounds and other special situations.