Private equity firms Blackstone and N+1 are reportedly looking for a €185m payout from Mivisa following a period of strong performance by the Spanish metal packaging group, which has driven up the value of its debt.
The firms planned to conduct a dividend recapitalisation according to Reuters, which cited banking sources.
The report noted such recapitalisations are rare as firms worry about adding to their investee’s debts and taking money out of them during challenging market conditions.
The deal would see Blackstone and N+1 – which acquired the business for $1.3bn in 2011 – secure a new loan of €150m in addition to taking a further €35m from the company’s cash reserves to pay themselves the dividend.
According to Reuters, the recapitalisation will take the company’s leverage from 3.8 currently to five times its EBITDA of €140m.
One of the sources quoted by Reuters said, “Initial reactions to this deal were that the sponsors must be kidding as the company is Spanish and involved in the food industry.
“However, if you look a bit more closely, the company has performed well and produces a lot of cash.
“From thinking it was ludicrous to do this deal in the current market, the company actually has a good business case to pull it off.”
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