Interline Inks $812M Takeover From Pair of Private Equity Firms

Interline Brands (NYSE:IBI) announced an $812 million leveraged buyout on Tuesday from GS Capital Partners and P2 Capital Partners that will take the industrial products distributor private.

The $25.50-a-share cash transaction values Jacksonville-based Interline at a 42% premium compared with its Friday close of $17.94. When debt is included, the overall value of the pact rises to $1.1 billion.

"We remain laser-focused on our goals and capabilities, and look forward to working with partners that have proven track records of investments in the distribution sector," Interline CEO Michael Grebe said in a statement.

Interline, which employs more than 3,500 people and generated 2011 sales of $1.25 billion, distributes and markets maintenance, repair and operations products. The company said it plans to keep its corporate headquarters, distribution and sales footprint in Jacksonville after the deal closes.

The leveraged buyout includes a provision that allows Interline to solicit alternative bids from third parties through June 28. If no superior bid emerges, the companies expect the deal to close by the end of the third quarter.

Shares of Interline soared 41.36% to $25.36 Tuesday, piling on to their 2012 rally of 15%.

P2 Capital Partners was already a shareholder of Interline and the companies said they expect unspecified members of management to invest a portion of their proceeds.

The private-equity firms said they have secured committed debt financing for the deal from Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC). Barclays (NYSE:BCS) served as an advisor on the deal for Interline. GS Capital is the private-equity arm of Goldman Sachs.