(Updates with financing structure in penultimate paragraph.)
July 25 (Bloomberg) -- KKR & Co., the private-equity firm led by billionaires Henry Kravis and George Roberts, is coming to the rescue of Preferred Sands, a supplier to oil and gas drillers that was forced to skip payments to lenders last year.
KKR is providing $680 million of debt and equity to refinance the debt of Radnor, Pennsylvania-based Preferred Sands, according to a statement today from the New York-based buyout firm. KKR is making a “significant investment” primarily from its special situations fund, and has underwritten with Jefferies LLC a new first-lien credit facility.
The private-equity firm has built a $6 billion special situations platform and pushed into the business of bailing out troubled companies since the 2008 financial crisis. Last year KKR provided a 320 million euro ($430 million) loan to Uralita SA, a Spanish building supplies company and in January injected 61.2 million euros in Hertha BSC, a Berlin soccer club.
KKR also has created the largest stock and debt underwriting business of any private-equity firm. It is the only buyout firm to rank among the top 25 underwriters of U.S. sponsor-led loans this year, according to data compiled by Bloomberg.
Preferred Sands, which provides sands used in hydraulic fracturing to the oil and gas industry, engaged restructuring advisors last year, according to Moody’s Investors Service. Standard & Poor’s lowered the company’s rating to D from CCC in December after it failed to make quarterly interest and principal payments on its debt.
Performance was weaker than expected as competition in the hydraulic fracturing sand and proppant industry intensified, according to the statement. It has about $500 million of term loans, according to data compiled by Bloomberg.
The new financing will close at the end of this month. It includes a $350 million term loan and as much as $50 million under an asset-based credit line, according to a person with knowledge of the matter, who asked not to be named because the information is private.
“This is a long-term plan that enables us to further grow our industry-leading platform of products and services,” Michael O’Neill, chief executive officer of Preferred Sands, said in today’s statement.