DXP Enterprises, Inc. has announced a significant refinancing and capital raising effort. The company has closed on refinancing existing senior secured term loan borrowings and raised an incremental $205 million in term loan borrowings. Following this transaction, DXP will have a total of $848 million in senior secured term loan borrowings. The new borrowings mature on October 13, 2030, and are priced at term SOFR plus an applicable margin of 3.25 percent.
The company intends to use the proceeds from this transaction for several purposes, including repaying borrowings under the existing senior secured term loan, general corporate purposes, potential acquisitions, and transaction fees and expenses. This move aims to provide DXP with continued operational and financial flexibility to reinvest in the business and pursue its organic and acquisition growth strategy.
The refinanced term loan borrowings are priced at 3.25 percent over term SOFR and continue to include a secured leverage covenant ranging from 5.75:1 to 4.75:1. The new loan under the credit agreement is secured by substantially all the company’s consolidated assets.
DXP Enterprises, Inc. expects that this refinancing will result in estimated annual interest savings of $3.2 million. This marks another successful step in the company's capital allocation strategy, which aims to prioritize investments that drive growth, apply excess cash flow to debt reduction when appropriate, and reinvest in facilities, equipment, and technology to enhance its competitive position.
The company's sales have shown significant growth, reaching $1.96 billion for the twelve months ended September 30, 2025, up from $1.0 billion in 2020. Additionally, covenant compliance adjusted EBITDA has increased from $64.9 million to over $225 million during the same period.
Following the close of this transaction at the end of Q3, DXP’s pro forma net debt to EBITDA stands at 2.8:1. This indicates a strong financial position for the company as it looks to further its growth and acquisition strategies.
DXP Enterprises, Inc. is a leading products and service distributor that provides value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico, and Dubai. The company’s offerings include innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production services. As a result of these announcements, the company's shares have moved 0.92% on the market, and are now trading at a price of $110.38. For the full picture, make sure to review DXP ENTERPRISES INC's 8-K report.
