KKR Credit has backed KPS Capital’s acquisition of car break technology firm Chassis International with a €175 million unitranche debt package.
The closing of the transaction enables KPS to acquire a minority stake in the company held by German engineering company Bosch and refinance the company’s existing debt.
Additionally, the loan will contribute to a distribution to existing shareholders.
Further details on the transaction were not disclosed.
Chassis is aiming to capitalise on developments within the automotive industry as technology and software have an increasingly important role in the manufacturing of cars.
The company aims to rapidly increase EBITDA within the next five years and the non-amortising, bullet structure of the unitranche debt enables the company to invest in its operations, according to KKR director Cristobal Cuart.
KPS initially explored the prospect of bank financing the transaction 12 months ago alongside an offering from KKR. However, the advantage of the unitranche structure was attractive to the growing company, said Cuart.
“While the cost of capital from a bank may be cheaper, the reality is when a company is trying to grow and invest it has to divert significant amounts of cashflow to amortising the debt,” he said.
He added that with continued growth of the company the doors will open for a potential initial public offering or attract further private equity interest.
KPS acquired a majority stake in Chassis from Bosch in 2012.
Michael Psaros, managing partner of KPS, said: “Under KPS’ ownership, Chassis has been transformed from a business unit into an independent, profitable, growing and technology-focused company.”