SOLA International has successfully completed a previously announced tender offer that has allowed it to redeem €185.0 million worth of 11 percent bonds, which were going to mature in March of 2008, for a total consideration of about €214.5 million or $252.0 million. The tender was financed in part by the sale of 6.9 million new shares at $17.50 apiece, including a greenshoe allotment, which raised $113.9 million. At the same time, SOLA has arranged a new credit facility that combines a $175 million 6-year term loan and a new $50 million revolving credit facility that replaces a former $90 million revolver. The two credit facilities are priced at LIBOR plus 2.50 and 3.00 percent, respectively.
The recapitalization, which takes advantage of the present low interest rates and of a regained momentum for SOLA, allows the group to reduce its debt by about $48 million and to save $17-19 million a year in interest expenses. It also opens the door for the acquisition of more prescription laboratories. The group now has a total of 29 labs around the world, including 8 primary labs in Europe and 7 in the USA. Since the beginning of 2003, SOLA has spent $18 million to buy 5 US labs and it wants more in that country. It also has 9 manufacturing facilities on 5 continents, with 40 percent of the capacity now concentrated on 3 factories in Mexico, and sales and distribution in 28 countries.