Chart Industries Secures $1.1bn in Financing Commitments

US LNG and industrial gases equipment provider Chart Industries announced June 5 that it has secured $1.1bn in financing commitments from banks.

The funds will power Chart's $592mn acquisition of Harsco Corporation's Industrial Air-X-Changers business (Harsco AXC). Chart has called the purchase a significant step towards executing its strategy to focus on cryogenic expertise for the industrial gas and energy spaces. The deal, which Chart reports has received accelerated antitrust clearance, is expected to close July 1.

The new financing commitments consist of a revolving credit facility that will replace and extend Chart's existing $550m revolver, and a new term loan, both of which were oversubscribed. 

Harsco AXC is projected to generate net sales of some $260mn in full year 2019 and 23% Ebitda margin as a percentage of sales. “With over $20mn of cost synergies expected in the first 12 months of ownership, we expect further margin expansion in the business,” Chart said in a statement.

"We are very pleased with the overwhelming support from existing and new banks to offer committed funding to Chart," said Chart Industries' CEO Jill Evanko. "Their support further affirms the strategic direction of this acquisition and our plan for profitable future growth."

The company also reiterated its full year 2019 sales guidance of $1.41bn - $1.46bn. The guidance assumes LNG project revenue in 2019 from the Venture Global Calcasieu Pass and Golar Gimi projects of $28m- $30m. Capital expenditures for 2019 are expected at $35mn-$40mn, “which includes the build out of an LNG fuel systems production line in Europe,” the statement adds.