Oregon Tool, Inc. Enhances Liquidity and Restructures Capital for Future Growth

Oregon Tool, Inc. Strengthens Financial Position through Strategic Transactions

Oregon Tool, Inc., a global leader in professional cutting tools, has recently announced significant financial maneuvers aimed at enhancing its liquidity and optimizing its capital structure. On February 20, 2025, the company reported completing three beneficial financing transactions that will substantially improve its fiscal health.

Overview of the Transactions

The initiatives involve approximately $150 million in new funds, which will allow Oregon Tool to boost its liquidity while reducing its pre-transaction debt obligations by over $75 million. The benefits of these transactions are supported by a wide section of its capital structure, which includes participation from 100% of the RCF lenders, about 83% of existing term loan amounts, and approximately 81% of existing unsecured notes.

One of the notable developments from these transactions was the establishment of Oregon Tool Lux LP, a newly formed subsidiary in Luxembourg. This entity issued around $156 million in new first-lien debt in the form of a term loan on February 18, 2025. Simultaneously, creditors from the revolving credit facility have transitioned their debts into a newly structured revolving facility secured by the new entity. This restructuring is set to extend the maturity of their term loans until October 2029, providing much-needed leeway in repayment schedules.

Details of Financial Restructuring

In addition to this strategic maneuvering, the ad-hoc groups representing term loan lenders have issued agreements to refinance existing debts under favorable terms. As a result, creditors have committed to converting their holdings into a combination of new second lien term loans and third lien notes, also managed by Oregon Tool Lux LP. The arrangements are designed to not only reduce immediate debt obligations but also to offer financial stability for the forthcoming years.

Terry Hames, President and CFO of Oregon Tool, emphasized the importance of these transactions in positioning the company for long-term success. He stated, "This transaction alleviates our balance sheet by retaining discounts, provides significant liquidity for our operational needs, and extends deadlines to Q4 2029. We are now positioned to continue investing in our strategic initiatives to create innovative solutions for our customers and achieve sustainable growth."

Supporting Partners

Oregon Tool worked with several financial and legal advisors throughout this process. PJT Partners served as the financial consultant, while Milbank LLP provided legal guidance for the company. Perella Weinberg Partners also acted as an advisor for the term loan group, with Davis Polk & Wardwell assisting in legal matters. Additionally, Lazard and Paul, Weiss, Rifkind, Wharton & Garrison LLP provided support for the crossholder group, and Cahill, Gordon & Reindel consulted on the revolving credit facility.

Future Implications for Oregon Tool

With these transactions, Oregon Tool not only secures a healthier cash flow but also simplifies its debt obligations, allowing it to focus on enhancing operational efficiencies and innovating its product offerings. As the market evolves, these proactive financial adjustments will enable the company to remain competitive in the precision cutting tool sector while meeting the demands of various industries globally, such as forestry, agriculture, and landscape maintenance.

By maintaining robust liquidity and extending its debt maturity, Oregon Tool is well-prepared to navigate potential market fluctuations while investing in vital areas for growth.

In conclusion, Oregon Tool, Inc.'s recent capital restructuring signifies a notable step towards a stronger and more resilient business model. Through these strategic changes, the company ensures that it is aligned for future opportunities and challenges, reaffirming its commitment to its stakeholders and the industries it serves. For more information about Oregon Tool and its comprehensive offerings, visit www.oregontool.com.