Lehman Brothers Merchant Banking Group disclosed this week that its LBO of ceiling-fan maker Hunter Fan Co., which closed Dec. 3, was valued at close to $250 million, or about 6.75 times Hunter’s trailing Ebitda.
Lehman Brothers Merchant Banking principal David Wilmott, who spearheaded the deal, said that the financing included a $95 million term loan and a $40 million revolving credit facility furnished by a bank syndicate led by J.P. Morgan Chase & Co. The revolver, which remained untapped, will be used to finance add-on acquisitions and for working capital.
In addition, Oaktree Capital Management LLC and Northwestern Mutual Life Insurance Co. supplied $50 million of mezzanine debt and purchased a 20% common equity stake in Hunter.
Lehman invested roughly $80 million in the common for about an 80 percent stake.
Mr. Wilmott portrayed Memphis-based Hunter as a high-margin generator of cash with promising growth prospects.
"The ceiling-fan business is very stable," Mr. Wilmott said. "But Hunter also has moved into newer products, such as air purifiers, humidifiers and programmable thermostats. That is the growth engine, and we think we can help management double the size of that part of the business [throughout] the next several years."
Hunter, the largest independent maker of branded fans in the country, sells its wares through Home Depot Inc. and Lowe’s Cos. outlets and other home-improvement retailers. The company owns no manufacturing plants, opting instead to outsource all production to Asia.
Lehman bought Hunter from Stonebridge Partners and Weston Presidio Capital, the private equity shops that acquired the company from investor Howard H. Leach in late 2001. Leach now is the U.S. ambassador to France. (The Deal.com)
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