Electrical Components International, a portfolio company of KPS Capital Partners, has closed its latest recapitalization. The proceeds of the transaction, financed by a $60 million loan to ECI, were used to fund a $57 million cash distribution to shareholders. A syndicate of banks and institutional investors led by BofA Merrill Lynch provided the financing while Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to ECI on the recapitalization.
NEW YORK, March 29, 2017 /PRNewswire/ — KPS Capital Partners, LP (“KPS”) announced today that its portfolio company, Electrical Components International, Inc. (“ECI” or the “Company”), has completed its fifth successful recapitalization. The proceeds of the recapitalization, funded by a $60 million upsizing of the Company’s term loan, were used to fund a $57 million cash distribution to stockholders.
KPS acquired ECI, through a newly formed affiliate, in May 2014. Since KPS’ acquisition, ECI has completed five successful recapitalizations. As a result of these recapitalizations, ECI has successfully completed three strategic acquisitions while distributing $107 million of cash to its stockholders. Following the latest recapitalization, ECI remains conservatively capitalized with the continued support of KPS to pursue organic and strategic growth initiatives in North America and abroad.
David Webster, Chief Executive Officer of ECI, said, “ECI’s successful recapitalization validates the incredible transformation ECI has experienced under KPS’ ownership, and we are pleased to return capital to our stockholders. Within the last three years, ECI launched its new, world-class, low-cost manufacturing facility in Morocco, won significant new business in both appliance and specialty-industrial end-markets, and successfully completed the strategic acquisitions of GHS, Whitepath and Fargo to significantly expand the Company’s presence in specialty-industrial end-markets. The Company’s conservative capital structure and the financial support of our stockholders will allow us to continue to grow ECI aggressively. ECI remains committed to deploying additional capital and resources in order to ensure total customer satisfaction. We thank our customers, suppliers and employees for their contributions to our success.”
Financing for the transaction was provided by a syndicate of banks and institutional investors with BofA Merrill Lynch acting as Lead Arranger.
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to ECI with respect to the recapitalization.
About Electrical Components International, Inc.
Electrical Components International, Inc. (“ECI”) is the world’s leading manufacturer of wire harnesses and value-added assembly services for consumer appliance and specialty-industrial applications. ECI manufactures products for a variety of electronic and electro-mechanical applications for customers worldwide in a diverse range of end-markets, including home appliances, agriculture and construction, heating, ventilation and air conditioning (HVAC), specialty transportation, automotive, commercial appliance, and commercial electronics. Headquartered in St. Louis, Missouri, ECI currently operates 35 manufacturing facilities in eight countries and employs approximately 17,000 associates worldwide. For more information, please visit www.ecintl.com.
About KPS Capital Partners, LP
KPS is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $5.3 billion of assets under management. For over two decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies have aggregate annual revenues of approximately $3.9 billion, operate 103 manufacturing facilities in 24 countries, and employ approximately 40,000 associates, directly and through joint ventures worldwide. The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.