ProFrac adds $150 million term loan, $100 million delayed-draw loan, ups ABL revolver

By Wendy Van Sickle

Columbus, Ohio, July 29 – ProFrac Holding Corp. amended its term loan agreement dated March 4, 2022 with Piper Sandler Finance LLC as administrative agent to increase the principal amount by $150 million to $452 million from the $302 million that was outstanding prior to the July 25 amendment and also increased the maximum amount of its asset-based revolver by $100 million to $300 million, according to an 8-K filing with the Securities and Exchange Commission.

The amended term loan also provides for an uncommitted delayed-draw facility of up to $100 million that will be available until the earlier of the consummation of ProFrac’s acquisition of U.S. Well Services, Inc. and March 31, 2023.

If the additional $150 million term loan and the delayed-draw loan have been funded and the acquisition has not been consummated by March 31, 2023, the borrower will be required to repay borrowings under those loans that are in excess of $175 million, resulting in a maximum required repayment of $75 million.

The amended loan also eliminated the third tier of the applicable margin, leaving a margin over adjusted SOFR of either 725 basis points if the company’s total net leverage ratio is less than 2x or 800 bps otherwise.

Further, it extended the due date for the first excess cash flow payment to the quarter ended Sept. 30, 2022 from the quarter ended Dec. 31, 2022, among other changes.

The company used proceeds from the $150 million additional term loan to fund its acquisition of SP Silica of Monahans LLC and SP Silica Sales, LLC, for a price of around $90 million in cash. It anticipates using the balance, along with operating cash, to facilitate the proposed acquisition of U.S. Well Services, to pay outstanding debt under the its ABL credit facility and/or for other general corporate purposes.

The maturity date remains March 4, 2025.

The credit agreement providing for the amended revolver is originally dated March 4, 2022, and JPMorgan Chase Bank, NA is the agent. The $100 million is on an uncommitted basis.

The amended asset-based facility also provide for certain permitted acquisitions, including the U.S. Well and SP acquisitions.

ProFrac is a Fort Worth-based oil and gas services company.

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