Grand Rapids-based X-Rite Inc. (Nasdaq: XRIT) Wednesday announced that the company has entered into a new $225 million senior secured credit facility with Bank of America, Fifth Third Bank, and GE Capital Corporation as co-lead and syndication agents.

This facility provides for a revolving credit facility in an aggregate principal amount of $55 million and a term loan in the aggregate principal amount of $170 million.

The new credit facility will refinance the company’s existing indebtedness under its 2007 senior secured credit facilities.

In addition, the company will use approximately $49.4 million of proceeds under the credit facility to redeem all of its outstanding Series A Preferred Stock as part of a plan to substantially reduce its overall cost of capital.

Said X-Rite CEO Thomas J. Vacchiano Jr.: “Our new credit facility not only provides for lower financing costs for the Company, but also provides additional flexibility to execute our strategic plans as we continue to transform the industry and the business of color.”

Beginning borrowing under the new facility will be approximately $185 million. As a result of the refinancing, the company estimates that annualized interest expense will be approximately $10 million, including approximately $8 million of annualized cash interest, which provides a significant reduction from the current interest costs. The company reported interest expense of $28 million for fiscal 2010.

In connection with the refinancing, the company will record charges approximately $14 million. These charges are principally related to the early redemption fee and unamortized discount on mandatorily redeemable preferred shares.

Said X-Rite CFO Rajesh K. Shah: “X-Rite’s ability to enter into this new credit facility reflects the strengthened financial condition of our Company and the support of our lending institutions as we move into the next phase of the Company’s strategic growth opportunities.”

X-Rite develops, manufactures, markets and supports innovative color measurement systems, software, color standards and services. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical.

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