MSC plans new loan borrowings for purchase of Barnes Distribution

By Sara Rosenberg

New York, Feb. 22 - MSC Industrial Direct Co. Inc. plans to get a new credit facility and term loan to help fund its acquisition of Barnes Group Inc.'s North American distribution business, company officials said in a conference call on Friday.

The new debt is expected to have a five-year maturity, and about $400 million is anticipated to be borrowed, officials said.

Under the agreement, Barnes Distribution North America, a Cleveland-based distributor of fasteners and other high-margin, low-cost consumables, is being purchased for $550 million.

Other funds for the transaction will come from cash on hand.

Goldman Sachs & Co. acted as exclusive financial advisor to MSC.

Closing is expected in the company's fiscal third quarter, subject to regulatory approvals and customary conditions.

Run-rate cost synergies are expected to reach $15 million to $20 million by fiscal 2015, and the acquisition is estimated to contribute incremental earnings per share of $0.15 to $0.20 in fiscal year 2014 and $0.30 to $0.40 in fiscal year 2015.

MSC is a Melville, N.Y.-based distributor of a broad range of industrial products to industrial customers.

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