S&P rates Valcour B-, loans B-, CCC

S&P said it gave Valcour Packaging LLC a B- issuer rating, a B- rating to its planned $400 million first-lien term loan with a 3 recovery rating and a CCC rating to its expected $160 million term loan with a 6 recovery rating.

Private equity firm Clearlake Capital Group LP is acquiring Valcour, the parent of Mold-Rite Plastics LLC.

Valcour’s capital structure will consist of a new undrawn, unrated $35 million asset-based lending facility due 2026, the first-lien term loan due 2028, the second-lien term loan due 2029 and $100 million of perpetual preferred equity.

“Mold-Rite participates within the highly fragmented and competitive North American rigid plastic packaging market. With revenues of $214 million in 2020, Mold-Rite is one of the smallest packaging companies we rate,” S&P said in a press release.

“We expect modest deleveraging over the next 12 months given favorable demand trends and growth initiatives that focus on increasing the top line. We project elevated leverage of about 9x for the period ending Dec. 31, 2021. We expect sales increase in the mid-double-digit percentage area for 2021 driven by a strong order pipeline and several new large business wins,” the agency added.

The outlook is stable.

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