TRC Companies, Inc., a provider of engineering, environmental consulting and construction-management services, announced it has completed the previously announced merger with affiliates of New Mountain Partners IV, L.P., an investment fund managed by New Mountain Capital, L.L.C. As a result of the transaction, NMC acquired TRC for $17.55 per share in cash. TRC shares will be delisted from the NYSE and will no longer be publicly traded.

On the closing date, in connection with and substantially concurrent with the closing of the merger, the company entered into a credit agreement governing its senior secured credit facilities with UBS AG, Stamford Branch as administrative agent, collateral agent, and L/C issuer.

The New Senior Secured Credit Facilities provide for a seven-year senior secured term loan facility in an aggregate principal amount of $325 million and a five-year senior secured revolving credit facility in an aggregate principal amount of $60 million. The proceeds of the New Term Loan Facility were used to fund a portion of the Merger Consideration and to pay fees and expenses incurred in connection therewith. The term loans under the New Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount of such term loans, with the balance due and payable at maturity unless earlier prepaid.

The New Revolving Facility includes a sub-facility for letters of credit. In addition, the Credit Agreement permits the Company to request incremental term loans or incremental revolving credit commitments in an aggregate principal amount of up to (a) the greater of (1) $68 million and (2) an amount equal to the Company’s trailing twelve-month consolidated EBITDA (as defined in the Credit Agreement) at the time of determination plus (b) an amount equal to all voluntary prepayments of the term loans under the Credit Agreement and certain other incremental equivalent debt and permanent revolving credit commitment reductions under the Credit Agreement, in each case prior to or simultaneous with the date of any such incurrence (to the extent not funded with the proceeds of long-term debt) plus (c) an unlimited additional amount so long as the Company and its restricted subsidiaries under the Credit Agreement (I) in the case of incremental indebtedness that is secured by the collateral on a pari passu basis with the New Senior Secured Credit Facilities, do not exceed a specified pro forma first lien net leverage ratio, (II) in the case of incremental indebtedness that is secured by the collateral on a junior basis with respect to the New Senior Secured Credit Facilities, do not exceed a specified pro forma secured net leverage ratio, and (III) in the case of unsecured incremental indebtedness, do not exceed a specified total net leverage ratio. The lenders under the New Senior Secured Credit Facilities are not under any obligation to provide any such incremental loans or commitments, and any such incremental loans or commitments are subject to certain customary conditions precedent and other provisions.

“The completion of this transaction marks the beginning of a new chapter for TRC and is an important step in executing on our long-term growth strategy,” said TRC Chairman and Chief Executive Officer Chris Vincze. “There is an immense need for creative thinking to help solve some of the world’s toughest infrastructure and energy challenges and, with NMC’s partnership, TRC is well-positioned to do just that. NMC’s financial strength and strategic relationships will help us strengthen our commitment to our clients, increase professional opportunities for our staff and accelerate our culture of innovation — all with the intent of building a more valuable company.”

Houlihan Lokey Capital, Inc. acted as financial advisor to TRC and Covington & Burling LLP acted as legal advisor to TRC.

Barclays Capital Inc. and UBS Securities LLC acted as M&A advisors to NMC and Kirkland & Ellis LLP acted as legal advisor to NMC. NMC also received M&A and industry advice from EFCG (Environmental Financial Consulting Group).