The US-based auto-ID technology supplier Symbol Technologies Inc. has entered into a US$250 million credit facility to replace its proposed stock offering and act as a permanent financing vehicle for its acquisition of Matrics Inc. The new credit facility will also provide Symbol with a source of ongoing liquidity.

     The new credit facility will refinance the US$250 million short-term credit facility entered into in connection with the acquisition of Matrics. During the fourth quarter of 2004, Symbol repaid US$50 million of borrowings under the short-term credit facility. 116.30.151.81 This article is copyright 2005 UsingRFID.com.

     In addition, the new credit facility will also replace the company''s existing (but currently undrawn) US$60 million senior secured bank line of credit. In light of the new credit facility, the company has decided not to pursue its proposed offering of common stock at this time.

     "After reviewing our options, and considering what would be in the best interests of our shareholders, we decided that establishing a new credit facility was a superior financing mechanism compared to proceeding with an equity offering," explained Symbol''s president and CEO, William Nuti. "The main driver of our decision to switch away from an equity offering is the strength of our cash flow and the confidence we have in our ability to extinguish this debt."

     The new credit facility will consist of a three-year US$100 million term loan and a five-year US$150 million revolving secured line of credit. J.P. Morgan Securities Inc. and Banc of America Securities LLC are to serve as co-lead arrangers and joint book runners for the new credit facility.

 

 

 

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