EnPro Industries, Inc., an industrial technology company, announced it has completed its previously announced acquisition of NxEdge, an advanced manufacturing, cleaning, coating, and refurbishment business focused on the semiconductor value chain, from Trive Capital for $850 million in cash. NxEdge joins Enpro as a part of its Advanced Surface Technologies (AST) Segment. The transaction marks a transformative next step in Enpro’s strategy to drive value through the addition of unique, high-margin, high-cash flow industrial technology businesses in secular growth markets.
We are excited to welcome the NxEdge team to Enpro as we take this important step forward together in our portfolio reshaping strategy,” said Eric Vaillancourt, President and Chief Executive Officer. “With NxEdge, we are well-positioned to significantly enhance the scale and breadth of our offerings across the semiconductor value chain, expand our relationships with customers and benefit from new, high-margin revenue streams. We have a comprehensive integration plan in place, and we look forward to capitalizing on the robust growth and value-creation opportunities this combination presents.”
In connection with the completion of the NxEdge acquisition, Enpro amended its senior credit facilities to provide for a five-year $400 million revolving credit facility, a $142.5 million term loan facility maturing in September 2024 to replace its existing term loan facility, a five-year $315 million term loan facility, and a 364-day $150 million term loan facility. Initially, borrowings under these facilities bear interest principally at an annual rate of LIBOR plus 1.75% or base rate plus 0.75%, subject to incremental increase or decrease based on a consolidated total net leverage ratio. Enpro used borrowings under the amended senior credit facilities and available cash to fund the purchase of NxEdge.
With the close of the transaction, Enpro’s net leverage ratio is approximately 3.7x net debt to adjusted EBITDA for the trailing twelve months. Proceeds from Enpro’s recently announced agreement to sell its Compressor Products International (CPI) business, which is anticipated to close by the end of the first quarter of 2022, is expected to assist in reducing the leverage ratio to 3.3x in the near term. Enpro remains committed to achieving over time a target leverage ratio in the 2.0x range and plans to use future excess cash flow to reduce leverage.
Advisors
Houlihan Lokey, which recently acquired GCA, served as financial advisor to Enpro, and Robinson Bradshaw served as legal counsel. Evercore advised Trive Capital on the sale of NxEdge, and Kirkland & Ellis served as legal counsel.