Rocky Brands completes acquisition of Honeywell brand portfolio

Rocky Brands Inc. closed an acquisition of the footwear business of Honeywell International Inc. with $210 million of debt under financing agreements, the company said.

The acquisition roughly doubled revenue. In 2020, the acquired brand portfolio generated roughly $205 million in net revenue and $24.5 million in EBITDA.

Earlier this year, Rocky Brands announced plans to fund the acquisition via an $80 million senior secured asset-backed credit facility priced at L+150 with Bank of America NA and a $130 million senior secured term loan facility priced at L+700 provided by The Direct Lending Group of TCW Asset Management Co. LLC.

Bank of America NA is administrative agent, lead arranger and book manager on the five-year ABL facility of up to $150 million, priced at L+125-175 (0% floor). Interest is subject to excess availability, starting at L+150, a Jan. 22 commitment letter showed. Interest on a first-in, last-out tranche is 50 basis points higher.

The $130 million senior secured term loan facility is priced at L+650-700, with a 1% floor. The Direct Lending Group of TCW Asset Management Co. LLC is administrative agent. Pricing is based on total average leverage, starting at 3.25x. Prepayments are subject to a 2% fee in the first two years, falling to 1% in the third year and zero in the fourth. The loan is subject to maximum leverage and minimum fixed charge covenants.

Honeywell International Inc.'s footwear brands include The Original Muck Boot Co., XTRATUF, Servus, NEOS and Ranger. Rocky Brands' portfolio includes Rocky, Georgia Boot, Durango, Lehigh and the licensed brand Michelin.