H.I.G. Capital’s credit arm has provided £28.4 million (€33 million; $44 million) in unitranche debt financing to Kelvin Hughes, an ECI Partners portfolio company that specialises in marine navigation systems and radars, the firm announced in a statement Thursday.
“We know ECI well, but we haven’t actually done a transaction like this with them in the past,” H.I.G. WhiteHorse managing director Appu Mundassery told Private Debt Investor, adding that the investment was not completed through a structured vehicle.
The refinancing will allow Kelvin Hughes to expand its global platform, the company’s chief executive officer said in a statement. Kelvin Hughes designs and supplies nautical navigation and surveillance systems for navies, merchant shipping and pleasure craft. ECI lists the company as having a value between £50 million and £100 million on its website.
“H.I.G. WhiteHorse have been supportive, pragmatic and helpful in their approach to the refinancing and we look forward to working together with them,” ECI managing director Ken Lindsay said in a statement.
H.I.G. WhiteHorse provides senior and subordinated debt for refinancings, growth capital, acquisitions, buyouts and recapitalisations for lower mid-market companies in the US and Europe with revenues of $50 million or more. Credit facilities are typically $15 million to $100 million.
As European banks have scaled back lending operations for the lower mid-market, opportunities have opened up for WhiteHorse and other non-traditional lenders, Mundassery said.
“For us, we really tend to the lower mid-market. And we tend to focus on that segment. So there’s always a level of activity because it’s not a part of the market that can go and finance high-yield bonds,” he said.