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Platinum’s Keystone Sets Dividend

Target: Keystone Automotive Operations

Loan Size: $335 million

Sponsor: Platinum Equity

Exeter, Pennsylvania-based Keystone was expected to launch a $335 million loan to repay existing debt and fund a distribution to shareholders, Thomson Reuters Loan Pricing Corp. reported. It’s unclear how big the dividend will be. Keystone is majority owned by Platinum Equity, a Los Angeles buyout shop founded by Tom Gores.

Keystone distributes and markets aftermarket automotive equipment and accessories like grill guards, roof racks and superchargers in North America. The company has 25 locations and serves more than 17,000 customers.

The dividend comes after Keystone was up for sale earlier this year. Platinum Equity hired Baird and UBS to run the process, Reuters reported in January. Keystone could fetch between $400 million and $500 million, Reuters said. The auction apparently didn’t produce a buyer. Executives for Keystone did not return calls for comment.

Keystone has a long history with private equity. In 1998, Keystone’s co-founders sold the company to an investor group led by Advent International. Bain Capital acquired the company in 2003 for $440 million, according to Buyouts. (The Advent group made about 3x their money with the sale to Bain, The Deal has reported.)

Keystone, which reportedly had $400 million in debt, suffered during the last recession. An out-of-court restructuring in 2011 wiped out $179 million of equity held by Keystone’s investors, including Bain, according to a source familiar with the situation. Platinum Equity, which was a bondholder, then acquired Keystone by converting debt to equity.

Luisa Beltran is a senior writer for peHUB.