SRAM LLC has bought out the private equity firm that invested in the company in 2009 through a recapitalization that moves the bicycle components maker one step closer to its initial public offering, according to documents filed by SRAM last week with the Securities & Exchange Commission.


 
On June 7, 2011, SRAM, LLC entered into new credit facilities consisting of a first-lien term and revolving facility and a second-lien term facility. The aggregate proceeds from the new credit facilities were $790.0 million. The proceeds from the new credit facilities were used to:



  • repay the entire outstanding amount under its prior credit facilities, which as of June 7, 2011, was $194.8 million (including accrued interest),
  • acquire all of the 3,640,000 Class A units of SRAM Holdings, LLC held by Trilantic and its co-investors for $575.0 million and
  • pay all fees and expenses related to the refinancing.

The $575.0 million received by Trilantic and its co-investors was in full payment for all of their interests in SRAM Holdings, LLC and consisted of $268.8 million in respect of the common participation right and $306.2 million in respect of the priority interests of the 3,640,000 Class A units held by Trilantic and its co-investors.


In connection with these transactions, SRAM Holdings, LLC amended and restated its operating agreement to combine the Class A units and the Class B units into a single class of common units and eliminate the corporate governance and liquidity rights of Trilantic and its co-investors. We refer to the entering into of our new credit facilities, the use of proceeds therefrom and the related amendment to the SRAM Holdings LLC operating agreement as “the refinancing.”
 
Following the refinancing, Trilantic and its co-investors have no remaining ownership of SRAM Holdings, LLC. For additional information regarding our new credit facilities, see Description of new credit facilities.


SRAM has yet to size or price its IPO.
 
Founded in 1987 to make drivetrain components including derailleurs, shifters, cassettes and chains, Chicago-based SRAM began transforming into a full-line, mid to high-end component supplier in 1995. The company has grown organically and through a series of strategic acquisitions, including the acquisition of RockShox Inc. in 2002, the bicycle business of Avid, LLC in 2004, Truvativ International Co., Ltd. in 2004 and Quarq in May.