Moody's assigns B1 to Buyers Edge, loans

Moody's Ratings said it assigned ratings to BEP Intermediate Holdco, LLC (Buyers Edge Platform), including a B1 corporate family rating, B1-PD probability of default rating and a B1 rating to the proposed backed senior secured first-lien bank credit facilities. The outlook is stable.

“The B1 CFR reflects moderately elevated leverage of about 4.5x at Dec. 31, 2023 (pro forma for the proposed transaction and Moody's-adjusted), relatively small revenue scale with exposure to the cyclical foodservice industry, balanced by solid growth prospects driven by healthy growth in active foodservice locations for the core group purchasing organization (GPO) business amidst a largely underpenetrated market, where many independent and mid-sized restaurants have yet to join a GPO to receive procurement discounts and rebates from foodservice manufacturers,” Moody’s said in a press release.

The new financing includes a planned $130 million senior secured revolving credit facility and a $550 million senior secured term loan B, which with $425 million of new perpetual preferred equity will be used to refinance $383 million in debt and $341 million of preferred equity, make a $155 million distribution, add cash to the balance sheet, and pay transaction fees and expenses.

“The stable outlook reflects expectations of healthy revenue growth in 2024 and good free cash flow generation (excluding the special dividends being paid in 2024 and related transaction costs),” the agency said.

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