DXP Enterprises Raises Another $105M for Operational, Financial Flexibility - Modern Distribution Management

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DXP Enterprises Raises Another $105M for Operational, Financial Flexibility

The distributor said the added funds will enable it to reinvest in the business and pursue further organic growth and targeted acquisitions.

Houston-based DXP Enterprises — No. 23 on MDM’s 2022 Top Industrial Distributors list — announced Dec. 22 that it has closed on an incremental $105 million Senior Secured Term Loan B borrowings that will be added to the initial $330 million Term Loan B that the company raised in December 2020.

DXP said the new borrowings give the company a total of $417.2 million in Secured Loan B borrowings — all which mature in 2027.

The company detailed that the new funds provide DXP with operational and financial flexibility to reinvest in the business and pursue its strategy around organic and targeted acquisition growth. DXP plans to use the proceeds to repay borrowings under DXP’s Asset Based Loan, and the remainder for general corporate purposes, potential acquisitions and transaction fees and expenses.

The new loan under the credit agreement is secured by the company’s consolidated assets.

“We will take this positive momentum and close out the year strong and look to drive growth in 2023,” DXP Chairman and CEO David Little said in a news release. “This successful capital raising demonstrates the confidence lenders have in our current and long-term plans. As we navigate changing market conditions, this financing will support us in executing our strategy and funding both working capital and acquisition growth. Our capital allocation strategy at this point in the cycle includes a mix of continuing to fund growth, applying excess cash flow to debt service, when appropriate, and supporting DXP in the market. We plan on maintaining liquidity and flexibility while pursuing growth opportunities and reinvesting in the business.”

DXP has completed nine acquisitions since the start of 2021, with most of them in markets outside of the company’s traditional oil & gas-oriented products and solutions. That diversification includes five bolt-ons in the wastewater/water management market — the latest of which was Kentucky-based Sullivan Environmental Technologies, with that deal announced Sept. 2.

See DXP’s news release for more information about the new Term Loan B borrowings.

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