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Prudential Capital Partners, SunTx Close $600MM Refi for Interface Security Systems

August 08, 2017, 07:35 AM
Filed Under: Security Systems

Interface Security Systems 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, Missouri and Plano, Texas, provides security systems and services to many of North America’s most recognized companies in the retail, hospitality, and restaurant industries.

Pursuant to the $600 million refinancing, the company’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.”

Fleming continued, “On behalf of myself and our entire team at SunTx, I’d like to thank our advisors on this transaction, who offered exceptional guidance throughout the process.”

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.”

Robert Derrick, Managing Director and Partner with Prudential Capital Partners, said, “With the support of SunTx, Interface Security Systems has developed a very impressive bundle of IP managed services to which their customers have reacted very positively.  We are pleased to be a partner in a new capital structure that will provide Interface with the ability to continue to grow and provide value to their customers.”

John E. Mack III, Executive Vice President, Co-Head of Investment Banking and Mergers & Acquisitions at Imperial Capital, said, “We could not be more excited at the successful completion of this new financing for Interface. It is gratifying to be associated with such an innovative and successful company at the front edge of new and more effective security and business intelligence solutions within the security industry.  We appreciate the confidence placed in us by the management team and SunTx to lead this new financing, which was oversubscribed, and we look forward to continuing to work alongside the Company and its investors for more success in the future.”

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.

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