S&P assigns Euro Ethnic, loans B

S&P said it gave preliminary B ratings to Euro Ethnic Foods Topco and Euro Ethnic Foods Bidco’s senior secured debt. Euro Ethnic operates Grand Frais.

PAI Partners is buying a controlling stake in Euro Ethnic Foods group. Pro forma for the transaction, PAI will own 60%, and the founders will keep a 40% ownership stake.

To support the transaction, Euro Ethnic Foods BidCo, EEF’s new intermediate holding company, plans to issue a new €465 million TLB, a €50 million RCF, and a €75 million second-lien term loan.

“We project these issuances will lead to S&P Global Ratings-adjusted debt to EBITDA of about 6.6x at the closing of the transaction. We estimate adjusted debt will amount to about €675 million, including €95 million of lease liabilities,” S&P said in a press release.

The outlook is stable. The outlook reflects EEF’s sustained high sales growth and solid operating margins will support deleveraging to about 6x-6.5x in 2021 and 5.5x-6x in 2022.

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