Prairie Village, KS-based WireCo WorldGroup announced that an affiliate of Onex Corporation is making an equity investment for a majority interest in WireCo. Funds managed by Paine & Partners, LLC, which acquired WireCo in 2007, will maintain a significant minority stake.
Chris Ayers, WireCo's President and CEO, said, "We are pleased to welcome this investment by Onex, which facilitates the refinancing of our capital structure and positions WireCo for future growth. Onex brings more than thirty years of investing experience in industrial businesses and our team is excited to work with another highly-qualified partner that shares our vision for WireCo's future. We will also continue to benefit from the insights of Paine & Partners, who have helped facilitate our growth as a market leader and will support our future efforts as it maintains a significant investment. We look forward to working with our strategic investors to create and deliver long-term value."
José Gramaxo, WireCo's Senior Vice President and Chief Commercial Officer, said, "WireCo is focused on continuing to provide our customers with the world-class service they have come to expect from us. With the additional flexibility we are gaining from our refinancing, we will have the ability to invest across WireCo's portfolio of leading brands."
Through the transaction, WireCo will refinance its capital structure and extend its debt maturities, substantially reducing leverage and annual interest expense. Upon closing, the Company expects to reduce its debt from approximately $840 million as of March 31, 2016 to approximately $600 million, subject to closing timing. Annual interest expense is expected to be reduced by over $20 million.
The terms of WireCo's agreement with Onex will be filed on form 8-K with the Securities and Exchange Commission. The transaction is expected to close later this year subject to regulatory approval and customary conditions.