Interface Security Systems, ranked No. 40 on SDM's Top Systems Integrators Report, announced the completion of a refinancing for a new capital structure that will facilitate strategic growth and expansion, with substantial contributions of new growth equity capital of $125 million from SunTx Capital Partners and Prudential Capital Partners.
Interface, headquartered in St. Louis and Plano, Texas, is a provider of monitored, mission-critical managed network, physical security and business intelligence (BI) services to large multi-location businesses over a private PCI-compliant cloud-based network. Interface provides such services to many of North America’s most recognized companies in the retail, hospitality and restaurant industries.
Pursuant to the $600 million refinancing, the Interface’s existing debt including the $50 million Capital One revolving credit facility, the $230 million senior secured notes due 2018, and the $115 million senior contingent cash pay notes due 2018, have been redeemed in full and the $67 million PIK senior notes due 2019 have been exchanged for new PIK senior notes due 2023. The new debt capital structure includes a $290 million senior credit facility consisting of a $230 million term loan A and an undrawn $60 million revolving credit facility led by Capital One. Additionally, Prudential Capital Partners will be providing $100 million of senior subordinated notes.
Ned N. Fleming III, founder and managing partner of SunTx Capital Partners, said, “With a new capital structure Interface is now ideally positioned to continue capitalizing on opportunities for accelerated growth and expansion. We are excited to invest additional growth-equity capital into the company and, in particular, to partner with Prudential Capital Partners. We look forward to further enhancing our productive partnership with Interface, as the company continues to achieve record growth.”
Michael Shaw, CEO of Interface Security Systems, said, “This recapitalization is an important step forward for the company as we continue to lead the retail digital technology transformation with our cloud-based bundled IP managed security, network and interactive video services. Moving forward now with a stronger balance sheet and improved cash flows, the company will focus on increasing our sales and marketing initiatives, expansion into new vertical markets, investment in new technologies and development of additional managed services that will enable us to provide an even broader range of mission critical cloud-based bundled services to both our existing customers and new clients.”
Imperial Capital LLC acted as financial advisor to Interface and Akin Gump Strauss Hauer & Feld LLP served as legal counsel for Interface. Schiff Hardin LLP served as legal counsel for Prudential Capital Partners. Buchanan Ingersoll & Rooney PC served as legal counsel for the lenders. Wilmer Cutler Pickering Hale and Dorr served as legal counsel for the bondholders.