S&P gives Arcaplanet, notes B

S&P said it assigned preliminary B ratings to Shiba Bidco SpA (Arcaplanet) and its planned €550 million of senior secured notes. The notes’ recovery rating is 3. Shiba also plans to issue an €80 million super senior revolving credit facility, which will be undrawn at close.

Cinven will use the proceeds to help it acquire Arcaplanet. Fressnapf will add its wholly owned subsidiary Maxi Zoo Italy to Shiba in exchange for a 33% stake, creating Italy's largest pet food retailer.

“The preliminary rating is underpinned by good cash flow generation, a solid EBITDAR ratio, and our expectation that Arcaplanet will focus on deleveraging, thanks to the conservative financial policy. Despite the high unadjusted gross leverage at closing, we expect FOCF generation to support the rating level, thanks to a structurally near-zero working capital profile, characterized by no seasonality, and discretionary capital expenditure (capex) of about €33 million per year,” the agency said in a press release.

The outlook is stable.

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