Ares Management and Crescent Capital Group have become the latest private equity owners of American thrift-store business Savers, in a buyout from Leonard Green & Partners and TPG.
Both Ares and Crescent are set to invest $165m in cash for a control stake, people with knowledge of the matter told Bloomberg.
Crescent owns a majority of the company’s unsecured notes and will swap them for a 7.5 per cent stake in the business. As a result, Savers’ first-lien lenders will have their loans paid off.
Savers sells used clothing, accessories and household goods across over 300 locations in North America and Australia.
TPG and Leonard Green initially backed the business in 2012 in partnership with the Savers’ chairman Thomas Ellison.
The private equity majors shared a 45.5 per cent stake, with Ellion also retaining 45.5 per cent and the management and others taking the rest, according to Moody’s data.
The restructuring agreement will see Ares and KKR support $590m of funded debt, including a $540m first-lien loan, the people added. Ares would also front a $50m second-lien loan as a part of the deal.
Savers hopes to complete the deal out of court in the next two weeks, however they have prepared creditor support agreement in case the company has to file for bankruptcy.
In the event of the bankruptcy, the company will have access to a $40m debtor-in-possession loan, the people said. The details are still being hashed out and may change depending on the outcome of talks.
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