Lignetics nets $255M financing backing ESG acquisition by EagleTree

Lignetics Inc. received a $200 million term loan backing an acquisition of the company by EagleTree Capital, market sources said.

Owl Rock was administrative agent. Northwestern Mutual Capital also participated in the debt financing, market sources said.

In addition to the $200 million term loan, financing includes a $25 million delayed-draw term loan for anticipated acquisitions as well as a $30 million revolver. Pricing is Libor+600 (75-basis-point floor). The RC includes a 50-bps commitment fee.

Net leverage on the transaction opens at 4.9x, sources said.

EagleTree acquired Lignetics from Taglich Private Equity and Mill Road Capital, which will exit the business via the transaction.

"Lignetics will be a new platform investment in the EagleTree portfolio, and Lignetics' operations, management team and personnel will remain unchanged following the EagleTree investment," according to a Nov. 1 statement about the transaction.

EagleTree is investing from its EagleTree Partners V private equity fund. Co-investors alongside EagleTree include Alpha Associates, Bullingham Capital, Farol Asset Management, Manulife Investment Management, Misland Capital, Northwestern Mutual Capital and Thrivent Financial.

Lignetics is the largest consumer-focused wood pellet manufacturer in the U.S., according to the company. The company diverts over 2,000,000 tons of wood waste into renewable consumer products. Brands include Green Supreme and Lignetics for residential heating, Bear Mountain BBQ and Lumber Jack for home grilling, and Catalyst Pet sustainable cat litter.