Business development company American Capital Strategies is providing music instrument maker Gibson Guitar with $52.5 million (€42.2 million) in second-lien loans and a second-lien committed acquisition line.
As part of the deal, Bank of America are providing a revolving credit facility and investing in senior-term debt, while Gibson’s current owners will keep 100 percent of the equity ownership.
“At Gibson, we are backing an excellent management team with substantial company ownership that has produced an enviable track record of growth and strong cash flows,” said Ira Wagner, the chief operating officer at American Capital, in a statement.
Publicly listed American Capital Strategies is a buyout and mezzanine fund with around $5.4 billion in resources, providing up to $250 million in senior debt, mezzanine and equity for growth, acquisitions and recapitalizations. So far this year, American Capital has invested $1.9 billion in companies such as janitorial supply company AmSan, niche grocery packaged goods concern Specialty Brands of America and jeweler Montana Silversmiths.
Last year, a number of private equity firms considered launching BDCs, with New York-based Apollo Advisors being one of the only firms to get a vehicle off the ground.
Another guitar company, Fender, was bought out by San Francisco-based private equity firm Weston Presidio and musical instrument maker Roland in 2002.