Treated wood and chemical firm Koppers Holdings, reported that Koppers Inc., one of its units, signed an agreement to buy the industrial division of Cox Industries for about $200 million in cash.
Cox Industrial manufactures and distributes power distribution and transmission poles, pilings and related products to investor-owned utilities, electric cooperatives, municipalities and other entities.
Cox Industrial facilities are strategically located near railroads and ports to facilitate shipments throughout the U.S. The operations include eight manufacturing locations, three dedicated peeling facilities, and 19 reload yards which support its market leadership position and opportunities for further growth in key expansion markets.
Under the terms of the transaction, Koppers is acquiring Cox Industrial for about $200 million in cash. Cox Industrial will be renamed as the Utility and Industrial Products unit of Koppers.
Koppers is financing the acquisition through existing bank debt and expects to enter into a new secured term loan facility, added to the company’s existing $600 million revolving credit facility, immediately after the closing of the transaction. The new secured term loan facility will include a secured term loan of $100 million with a quarterly amortization of $2.5 million and a five-year maturity. The initial average borrowing rates under the new facilities are expected to be about five percent.
Wells Fargo Securities, LLC acted as financial advisor to Koppers in regard to the transaction, and K&L Gates LLP acted as legal counsel to the company. Committed financing will be provided by PNC Bank, National Association.