Moody's rates Quality Group, loans B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Asterix HoldCo GmbH ("Asterix"), a new entity created for the acquisition of the Quality Group GmbH (TQG). Concurrently, the agency gave B2 ratings to the €300 million backed senior secured term loan B and the €50 million backed senior secured revolving credit facility both due in 2029 and borrowed by Asterix AcquiCo GmbH. The outlook is stable.

In July, CVC Capital Partners completed the acquisition of a majority stake of TQG alongside all previous owners, who reinvested in the business as minority shareholders. The transaction valued the company at around €800 million and was financed with a mix of debt and equity, including a seven-year €300 million term loan and a 6.5 years €50 million revolving credit facility.

"The B2 rating reflects TQG's relatively strong financial profile, supported by its high profitability and cash generation and moderate leverage for the rating category, as well as its leading market position in the sports and dietary nutrition market in Germany," said Valentino Balletta, a Moody's Analyst and lead analyst for TQG, in a press release.

"However, the rating is constrained by the company's limited scale, narrow business focus and relative concentration in Germany, as well as some inherent risks related to its influencer-led marketing business model," Balletta, added.

Moody’s forecasts TQG will produce solid FCF of more than €40 million in financial year 2022 and around €25 and €30 million per year in 2023 and 2024, respectively.

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