S&P rates Stars UK, loans B

S&P said it gave B ratings to Stars UK Bidco Ltd., the new parent of Theramex, and its planned €550 million term loan B and new €100 million revolving credit facility.

PAI Partners and Carlyle are buying Theramex from CVC Partners through Stars UK. IWH UK Finco Ltd., Theramex’s current parent, is expected to cease to exist. Stars UK will also issue €125 million of payment-in-kind (PIK) notes, and a further equity injection of €747 million to help fund the deal, repay debt and pay fees and expenses.

“The planned increase in debt will raise S&P Global Ratings-adjusted debt to EBITDA, although we expect deleveraging to start from the financial year 2023 and healthy FOCF generation. The new capital structure following the completion of the acquisition results in a higher overall debt level, with our adjusted debt level at about €679.5 million for the financial year ending Dec. 31, 2022 (FY2022) comprising the new TLB, PIK notes and lease liabilities,” S&P said in a press release.

The agency said it sees Theramex’s adjusted leverage metric to rise to above 7x in FY2022 and decline below 7x from FY2023 and approach 6x by FY2024 because of solid revenue growth and EBITDA generation.

The outlook is stable.

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