Great Rock closes $55m loan for rubber compounder AirBoss

Westport, Connecticut – US financing company Great Rock Capital has closed a $55 million (€52 million) senior secured term loan facility with AirBoss of America Corp.

The funds, together with an $180 million revolving credit facility agented by the Toronto-Dominion Bank, will refinance the Canadian compounder's existing debt, Great Rock announced 10 Dec.

Publicly traded AirBoss is “the second largest” rubber solutions and custom compounding company in North America, said Great Rock in its statement.

"This new credit facility will provide them with significantly increased financial flexibility and liquidity to support their strategic growth initiatives,” said Stuart Armstrong, CEO of Great Rock Capital.

AirBoss delivered a weak third quarter this year but said it expected its ongoing operational efficiency programme and encouraging signs within its manufactured products (AMP) segment to drive growth over the coming quarters.

For the quarter ended 30 Sept, the compounder reported adjusted earnings (EBITDA) of $6.4 million, down 11.4% year-on-year, on 5.9% lower sales of $96 million.

The group saw a decline in demand across both its rubber solutions (ARS) and manufactured products (AMP) businesses with ARS reporting a 17.5% year-on-year decline in volumes during the first nine months of the year.

In AMP, the compounder witnessed “pronounced softness” in demand for automotive rubber moulded products, particularly for SUVs and light trucks.

However, the unit saw improved sales in the defence products business.