US national body shop operator Service King has entered into an agreement with key financial stakeholders that will provide the company with new capital, reduce debt, extend remaining existing debt maturities, and position it to increase reinvestment for long term growth.
“This agreement is an important step forward in strengthening our financial position by adding new capital and reducing our debt, positioning Service King to continue to grow and succeed over the long term,” said David Cush, Chief Executive Officer at Service King. “We are confident this recapitalisation will allow us to further invest in the company and our people, and enable Service King to continue delivering safe, superior auto body repair services to our customers across the markets we serve.
“We thank our insurance carrier partners and vendors for their continued support, and our noteholders and lenders for their collaboration throughout this process and confidence in our business.”
Under the terms of the transaction support agreement, Service King will receive US$200 million in new capital, reduce net indebtedness by over US$500 million, and extend remaining existing funded debt maturities until June 2027. Affiliates of Clearlake Capital Group will assume majority ownership of the company.
“We see significant opportunities ahead for Service King as the company continues to deliver on its mission of being the national collision repair operator of choice across several of the country’s fastest growing MSAs,” said Jose Feliciano, co-founder and Managing Partner of Clearlake. “We are excited to partner with Service King and its talented teammates and re-invest in the business to drive growth for the long term.”
Service King said it will continue operations with no interruptions as a result of the transaction. The financial stakeholders have committed to support the transaction in all scenarios, subject to various conditions in the comprehensive agreement.