Exeter, Pa.-based Keystone expects to launch Tuesday a $335 million loan to repay existing debt and fund a distribution to shareholders, Thomson Reuters Loan Pricing Corp. says.
It’s unclear how big the dividend will be. Keystone is majority owned by Platinum Equity, a Los Angeles PE firm founded by Tom Gores.
Keystone distributes and markets aftermarket automotive equipment and accessories like grill guards, roof racks and superchargers in North America. The company has 25 locations and serves more than 17,000 customers.
The dividend comes after Keystone was up for sale earlier this year. Platinum Equity hired Baird and UBS to run the process, Reuters reported in January. Keystone could fetch between $400 million and $500 million, Reuters said. The auction apparently didn’t produce a buyer. Officials for Keystone did not return calls for comment.
Keystone has a long history with private equity. In 1998, Keystone’s co-founders sold the company to an investor group led by Advent International. Bain Capital, in 2003, acquired the company for $440 million, according to Buyouts. (The PE owners made about 3x their money with the sale to Bain, The Deal has reported.)
Keystone, which reportedly had $400 million in debt, suffered during the last recession. An out-of-court restructuring in 2011 wiped out Bain’s $179 million equity, The Deal said. Platinum Equity, which was a bondholder, then acquired Keystone by converting debt to equity. UPDATE: A source familiar says the $179 million was actually the total equity held by all of Keystone’s investors, including Bain.