S&P gives Mediq, loan B

S&P said it gave B ratings to Magellan Dutch BidCo BV (Mediq) and its planned €500 million term loan. The loan’s recovery rating is 3, indicating an expectation of meaningful recovery (50%-70%, rounded estimate: 55%) in default. Mediq is being acquired by Advent’s fund IX.

“Mediq benefits from leading market shares in Netherlands (estimated at around 30%), Denmark (around 14%), Finland (around 12%), Sweden (10%), and Norway (6%). In Germany, the market is larger but also highly fragmented and with niche segments. These leading positions will allow the group to capture rising demand,” S&P said in a press release.

The loan proceeds will be used to repay Mediq’s term loan B, and pay shareholders’ and transaction fees. As a result, the next debt maturity will be in 2028. After the refinancing, cash on the balance sheet will amount to €20 million, and there will be a new €100 million revolving credit facility. S&P said it forecasts adjusted debt to EBITDA metric at 5.5x-6x and at least €30 million of free operating cash flow.

The outlook is stable.

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