Global engineering group Cavotec announced yesterday that it has successfully signed a EUR 95 million Senior Revolving Credit and Bank Guarantee Facility with a syndicate of leading global banks as well as Swiss banks.
These Facilities were fully finalised on 7 July 2015 and will provide the Company with the resources it needs to support its next stage of global growth. The new agreement is a refinancing of a pre-existing syndicated credit arrangement signed in August 2011.
“I would like to thank all those involved in securing this agreement — our partners on the banking side, and in Cavotec — which underlines the robust business model at the core of the Company,” said Ottonel Popesco, Cavotec CEO.
The agreement incorporates a committed EUR 70 million senior revolving credit facility, and a EUR 25 million senior revolving bank guarantee facility, which can be extended to EUR 100 million and EUR 30 million respectively.
We find it particularly interesting that Cavotec states in its press release that “the new resources will be used to underpin Cavotec’s M&A activities, product development, and growth into new and existing markets.” Following the problems in connection with the acquisition of US company INET (4 years ago), Cavotec’s M&A activity was somewhat muted and behind their own and the market’s expectations. With these issue out of the way and the new financing in place, we believe Cavotec could announce an acquisition in the near future that could please its shareholders.