S&P gives Pearls, loans B

S&P said it gave preliminary B ratings to Pearls (Netherlands) Bidco BV and its planned term loan and revolver. The recovery rating is 3.

Pearls will acquire and merge Caldic Holdco BV (Caldic) and GTM Holding SA. It plans to secure a €1 billion equivalent term loan due 2029, a €155 million revolver due 2028, assumed to be undrawn at closing, and €265 million of second-lien senior secured debt due 2030.

Pearls will use the proceeds and €1.3 billion of common equity to fund the equity value of the combined firm, which will do business as Caldic Group, refinance debt and pay expenses and fees. The deal is expected to close by March 31.

S&P said it estimates the group’s S&P Global Ratings-adjusted debt to EBITDA will stand at about 6.5x-7x in 2022 and 6x-6.5x in 2023.

“We expect that solid revenue growth, mostly driven by continued strong demand in key end markets and cross-selling opportunities post transaction, combined with improving profitability, will support gradual deleveraging,” the agency said in a press release.

The outlook is stable.

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