KRG Capital Partners (KRG), a Denver-based private equity firm, announced that it has completed the refinancing of the bridge provided by KRG in connection with its investment in Tri-County Petroleum Inc., (Tri-County or TCP) a leading specialty distributor of industrial and commercial lubricants. The original investment in TCP closed in December 2007 at which time KRG bridged the entire consideration with the fund's capital to provide an expedited and certain close for TCP's shareholders.
Immediately following the closing, KRG and the TCP management team worked with KRG's relationship lenders to refinance the bridge with permanent financing. The senior facility was led by GMAC Commercial Finance, with three additional participants, and the mezzanine facility was led by Golub Capital. The lenders demonstrated significant support for the TCP management team and the company's vision for future growth along with the value they placed in the long-standing relationship with KRG from previous transactions.
This "club" syndication of TCP's debt among relationship lenders is the same approach taken in all of KRG's 10 Fund III platform companies and in nearly all prior transactions consummated by the firm. Despite the challenging credit markets, KRG has successfully completed three financings of new platform companies, including TCP, in 2008, raising over $385 million of total funded debt, including $290 million of senior financing. KRG believes that its ability to work with its strategic lending relationships to execute transactions on a club basis eliminates significant transaction risk associated with rated or heavily syndicated financings typically used in the private equity market.
"KRG decided early on that it could differentiate itself in the buyout business by building long-term, deep, strategic relationships with a core group of senior and subordinated lending partners," stated Co-Founder and Managing Director, Mark King. "We know all the lenders in our transactions, and our lending partners understand our mission, believe in our firm, and are willing to support our transactions with significant commitment levels. This allows KRG to enter into transactions with sellers and entrepreneurs with the confidence that we will deliver the financing necessary to close our transactions as proposed."
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