Acme United Expands Debt Capacity to Fund Growth and Acquisitions

Acme United Corporation (US: ACU – $32.37) entered into a new mortgage agreement with HSBC Bank for $11.6 million. The lender provided an attractive loan fixed at 3.8% for 7 years with a 20-year amortization schedule. Given the rising inflation and subsequent interest rates, it’s a wise decision of Acme’s management to negotiate a loan with a fixed rate.

The mortgage covers both Acme’s 54,000 square-foot facility in Vancouver, Washington where First Aid Only’s first aid kits are produced, as well as the Company’s 340,000 square foot manufacturing and distribution center in Rocky Mount, North Carolina.

About $3 million of the loan was immediately used to pay down the previously existing mortgage on the Vancouver property, leaving an additional $8.6 million in Acme’s till. These new funds come on top of Acme’s $5.3 million in cash and $10 million availability under its line of credit on September 30, 2021.

As a result, the Company can move forward with a very solid balance sheet to fund growth, pay dividends, potentially buy back shares and finance acquisitions. Smallcaps Recommendation: BUY.

Smallcaps.us Advice: BuyPrice Target: $42.02Latest Company Report (pdf)
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