S&P assigns Accell, loans B

S&P said it assigned B ratings to Accell Group NV and the loans borrowed through its new holding company Sprint HoldCo BV. KKR and Teslin Capital Management bought Accell Group for about €1.9 billion in a public-to-private LBO. The outlook is stable.

To finance the deal Sprint issued a €700 million term loan and a €180 million revolver, which remained undrawn at closing. KKR invested €1.3 billion in equity, representing about 65% of the financing needs. KKR now holds 88% of Accell Group, while Teslin retained a 12% ownership stake.

“The issuance led to an S&P Global Ratings-adjusted leverage ratio of about 5.3x at the close of the transaction. We also note that the offer memorandum reflects KKR's commitment to a maximum net leverage ratio of 5x, based on structuring EBITDA and excluding any potential drawings under the existing facilities for working capital purposes from the debt definition. The committed threshold corresponds to an S&P Global Ratings-adjusted leverage ratio of about 5.5x-5.9x, depending on the RCF and working capital facility drawdowns, which reflects the future leverage trajectory for the company,” S&P said in a press release.

The agency noted that “Accell Group's solid market position will further benefit from electric bike tailwinds, albeit in a fragmented sector. The electric bike market has been growing at a steady pace over the past several years, with a compound annual growth rate (CAGR) of about 25% over 2015-2019. The Covid-19 pandemic significantly accelerated this growth, with a reported CAGR of about 42% in 2020 and 2021.”

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