Great Rock Capital, a commercial finance company focused on middle-market lending, has successfully closed a $55 million senior secured term loan facility with AirBoss of America Corp. (TSX: BOS) (OTCQX: ABSSF), a leading player in the North American rubber solutions and custom compounding sector. This strategic financial move aims to enhance AirBoss’s liquidity and support its growth initiatives.
The new term loan will be instrumental in refinancing AirBoss’s existing debt, allowing the company to leverage its fixed assets effectively. This refinancing is complemented by a revolving credit facility arranged by The Toronto-Dominion Bank, which together will provide a robust financial foundation for AirBoss as it navigates its strategic growth plans.
Stuart Armstrong, CEO of Great Rock Capital, expressed confidence in AirBoss’s potential, highlighting the company’s strong management team and commitment to innovation. “This new credit facility will provide them with significantly increased financial flexibility and liquidity to support their strategic growth initiatives,” he stated. Armstrong’s remarks underscore the importance of this financing in enabling AirBoss to pursue its objectives effectively.
AirBoss of America Corp. is recognized as a diversified developer and manufacturer specializing in survivability solutions and advanced rubber compounds. Founded in 1989, the company operates through two main divisions: AirBoss Rubber Solutions and AirBoss Manufactured Products. The former focuses on custom rubber compounding with an impressive annual capacity of 500 million pounds, while the latter supplies anti-vibration solutions to various sectors, including automotive and defense.
The recent financing aligns with AirBoss’s ongoing efforts to enhance its market position and operational capabilities. The company is actively pursuing a strategic transition aimed at becoming a global leader in custom rubber compounding, as indicated by President and Co-CEO Chris Bitsakakis. He noted that the new credit facilities will provide the necessary financial flexibility to execute this transition successfully.
AirBoss is currently engaged in a comprehensive strategic review, exploring various opportunities to enhance shareholder value. Although specific transactions are not imminent, the company is considering potential divestitures and monetization of real estate assets as part of its long-term strategy.
The terms of the new credit facilities include a reduction in the maximum applicable margin on revolving debt from 450 basis points to 225 basis points, conditional dividend increases, and requirements for maintaining minimum adjusted EBITDA and liquidity thresholds. These adjustments reflect a commitment to prudent financial management while positioning AirBoss for future growth.
As AirBoss continues its strategic transition, the partnership with Great Rock Capital marks a significant step forward. The infusion of capital not only strengthens the company’s balance sheet but also empowers it to pursue innovative projects that can drive long-term growth and sustainability. Great Rock Capital’s $55 million term loan facility is set to play a crucial role in supporting AirBoss of America Corp.’s ambitions within the competitive landscape of rubber solutions.
