The company has determined that it will decrease the total size of its previously announced $1.2 billion financing and will not proceed with its private offering of unsecured notes. The company instead expects to increase the amount of new senior secured debt to approximately $900 million.
If incurred, the company will use the proceeds of the new debt financing together with cash on its balance sheet to refinance its existing senior secured credit facility and to pay a special cash dividend of up to $6 per share on its common stock.
The company still expects to replace its current $150 million unfunded revolving credit facility with a similar sized asset-based revolving line.
"We believe this revised transaction structure is a disciplined approach towards creating long-term shareholder value and represents an attractive return of capital to shareholders," said Aaron Jagdfeld, president and chief executive officer. "Given our track record of strong free cash flow generation, we are confident this new capital structure will allow us to further invest in our organic growth initiatives and will provide the flexibility for potential acquisitions in the future."
The declaration of the special cash dividend remains subject to market and other conditions, and will not occur unless the new senior secured credit facility is finalized on acceptable terms. Assuming that the financing is obtained, the company expects its board of directors to declare and the company to pay the special dividend by or shortly after the end of the second quarter of 2012.