Golub syndicates $515m one-stop loan

The deal increases and refinances the borrower’s existing multi-tranche debt facility with a one-stop or unitranche loan.

Private equity-controlled Data Device Corporation (DDC) has signed a $515 million unitranche deal. The financing was led by New York-based Golub Capital which syndicated the facility out to a range of other non-bank lenders, said Andy Steuerman, senior managing director and head of mid-market lending at the firm. 

The deal is one of the largest unitranche financings executed to date, said Golub, which acted as agent, sole lead arranger and sole bookrunner on the deal. 

“There’s a false impression that deals over a certain size cannot be done by finance companies,” Steuerman told PDI. “This deal proves that wrong.”

The facility refinances a $410 million loan package that DDC, which designs and manufactures components used in the aerospace and defence industries, signed in July 2014. The increased size is in support of its recent acquisition of Emrise Electronics, the device division of Emrise Corporation. 

Asked why DDC opted for the large one-stop deal over tapping the broadly syndicated loan market or bond market, Steuerman said that the structure provided the borrower and Behrman Capital, its private equity owner, with certainty of execution. He added that the company’s previously poor credit score also made it a less popular credit. 

The new facility has a five- to six-year tenor and the pricing is in line with market levels, said Steuerman, adding that the transaction does not command a significant premium. 

The $410 million financing being replaced comprised a $300 million senior term loan provided by Ares Capital Corporation and Golub, a $30 million revolver from the same senior lenders, as well as an $80 million second lien term loan provided by Ares and Brightwood Capital Advisors.

Golub Capital has more than $15 billion of capital under management. The firm also has lending offices in Chicago, New York and San Francisco. 

Behrman Capital, which specialises in defence and aerospace, healthcare services and manufacturing and distribution, has offices in New York and San Francisco.

Emrise Electronics controls two power units, XCEL Power Systems and Pascall Electronics, which produce power supply units for the aerospace, defence and industrial markets.