HEICO increases credit facility to $2.2 billion
What's the deal? HEICODealroom has a profile for this one. Try Dealroom → Corporation, a major supplier to the aviation, defence, space, and electronics industries, has increased its unsecured revolving credit facility from $2B to $2.2B. The deal, announced on June 12, extends the facility's maturity to 2031 and includes an accordion feature that could expand it to $3B under certain conditions.
The banking syndicate is led by joint lead arrangers Truist Bank, Bank of AmericaDealroom has a profile for this one. Try Dealroom →, Wells Fargo, PNCDealroom has a profile for this one. Try Dealroom →, TD BankDealroom has a profile for this one. Try Dealroom →, and Crédit AgricoleDealroom has a profile for this one. Try Dealroom →. Huntington, JPMorgan, RBC, and M&T Bank also participate. Borrowings bear interest at SOFR plus 75 to 125 basis points, indexed to HEICO's investment-grade rating.
Why now? HEICO has completed over 110 acquisitions since 1996 and shows no signs of slowing down. The company said proceeds will primarily fund further acquisitions and general business purposes.
"Expanding the credit facility to $2.2 billion gives us meaningful runway to keep doing what we do best: finding great businesses and welcoming them into the HEICO family," said co-chairmen and co-chief executive officers Eric A. Mendelson and Victor H. Mendelson.
Carlos L. Macau Jr., HEICO's chief financial officer, called it "exactly the kind of low-cost, flexible capital that funds accretive growth while keeping our leverage conservative and our discipline intact."
What could go wrong? HEICO's acquisition-heavy strategy depends on a steady pipeline of attractive targets at reasonable prices. A downturn in commercial aviation, cuts to defence spending, or rising interest rates could squeeze returns on leveraged deals. The company also flagged risks including cybersecurity threats, supply chain disruptions, and shifts in government export policies.
The signal: HEICO's ability to assemble a six-bank syndicate and secure pricing as tight as SOFR plus 75 basis points underscores the premium lenders place on mature, technology-driven aerospace and defence platforms with proven roll-up track records. With over 110 deals closed since 1996 and an accordion option stretching to $3B, the facility positions HEICO to accelerate consolidation in a fragmented supply chain at a time when Western defence budgets remain robust and aftermarket demand from growing commercial air traffic shows few signs of softening.
Read more: marketscreener.com
