Reddy Ice Corp. has acquired Triangle Ice Co. with a $45 million add-on "B" piece partially funding the acquisition. Sponsors Trimaran Capital Partners and Bear Stearns Merchant Banking also put in $10 million in new private equity as well as cash available on hand to back the deal, said Steven Janusek, executive v.p. and cfo of Reddy Ice. The added debt is tacked onto an existing $135 million "B" loan led by CIBC World Markets and Credit Suisse First Boston that has pricing of LIBOR plus 3%. The loan was put in place over the summer to back the acquisition of what was then called Packaged Ice, for $450 million by the two sponsors who then formed Reddy Ice Group. There is also a $35 million revolver.
Triangle Ice operates mainly in North and South Carolina with annual revenues of about $30 million. Reddy Ice does not have a set acquisition plan, but considers itself more opportunistic, according to Janusek. "There's only three or four ice companies of size in the U.S. [and] Triangle is one," he said. "When a premiere business like that comes available you [have got] to look at it and see if it makes sense." The acquisition will help the company serve national customers better by creating more places to source ice throughout the Eastern market and a more continuous flow of facilities on the Eastern corridor, Janusek noted. He declined to disclose the Triangle acquisition price.
The company's debt-to-EBITDA is 4.5 times, the same level as when the company went private in August. The ice manufacturer and distributor is focused on debt reduction, he added. "[We will have] substantial free cash flow over the next several years that we have earmarked toward debt reduction," he noted.