Yesterday, Goldman’s private equity fund and P2 Capital agreed to buy Interline Brands for about $1.1 billion or $25.50 per share cash. Lenders on the deal, Goldman and Bank of America, have committed to providing about $928 million in debt, according to Thomson Reuters Loan Pricing Corp.
GS Capital is injecting $369.3 million equity into the deal, according to an SEC filing. P2 Capital, which owns about 8% of Interline, is putting in $6.4 million and 927,386 shares of stock, the filing said.
Moody’s put Interline under review for possible downgrade. The company has a corporate family rating of “B1” and probability of default at “B1,” Moody’s said.
Jacksonville, Fla.-based Interline is a distributor and direct marketer of maintenance, repair and operations products. Interline’s largest two categories are janitorial/sanitation products followed by plumbing products, Moody’s said. The company produced about $1.3 billion in revenues for the 12 months through March 31, Moody’s said.
P2 Capital is a New York hedge fund run by Claus Moller that invests like a PE firm. Founded in 2006, P2 reportedly calls itself a “friendly activist” fund, because it likes to constructively help out the management teams of its portfolio companies, according to Seeking Alpha.
GS Capital Partners is Goldman’s PE arm. The unit is currently investing out of GS Capital Partners VI, which raised $20 billion in 2007.
Barclays provided financial advice to Interline, while Goldman Sachs advised GS Capital in the deal. P2 apparently did not use an outside investment bank.
Officials for P2 Capital declined comment. Goldman couldn’t be reached for comment.
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