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Platform Specialty Announces New Term Loan B and Revolver

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Platform Specialty Products Corporation announced the pricing and syndication for a 7-year $750 million senior secured term loan B and 5-year $330 million senior secured revolving credit facility, which is subject to certain conditions.

Per the company, the revolver and the term loan B (collectively termed as ‘facilities’) are subject to the closure of the earlier announced sale of the company’s Agricultural Solutions business — Arysta LifeScience — to UPL Limited along with the execution and finalization of definitive documentation.

Platform Specialty’s existing $800 million of 5.875% senior notes due 2025 along with the proposed facilities will represent Element Solutions’ debt capital structure. Notably, Element Solutions is the previously announced name for the company after the Arysta Sale. The proposed facilities signify a strong step toward establishing a standalone Element Solutions. The new capital structure is expected to reduce the company's cost of capital.   

Platform Specialty plans to utilize the net proceeds from the Arysta Sale and funds from the facilities to retire all $1,100-million total principal amount of the existing 6.5% senior notes due 2022 and all €350-million total principal amount of the existing 6.0% senior notes due 2023; repay revolving credit facility along with the existing senior secured term loans under its current senior secured credit agreement; finance associated expenses as well as transaction fees; and use the excess cash to fund potential share repurchases of up to $750 million conditioned on closure of the Arysta Sale.  

The company expects the periodic interest rate of the term Loan B to be the LIBOR base rate along with a 2.25% spread. However, it is exploring opportunities to lower cash interest rates for some or all of the term loan B through derivative instruments.

Shares of Platform Specialty have lost 14.7% in the past three months compared with the industry’s 4.2% decline.

 



Zacks Rank & Stocks to Consider

Platform Specialty currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc (CF - Free Report) , Methanex Corporation (MEOH - Free Report) and The Mosaic Company (MOS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained 20% in the past year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 7% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7%. The company’s shares have rallied 45.2% in the past year.

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