...Sponsors Rely Increasingly on Acquisitions: High equity cushions and weak pricing power are increasingly leading to the search for scale and synergies among recapitalised leveraged credit borrowers, notably financial sponsor-owned borrowers. In Europe, more cash proceeds are being applied towards mergers and acquisitions (M&A) in 2015 than in the previous three years, according to Fitch Ratings' credit opinion database. M&A recapitalisations allow sponsors to refinance existing debt on favourable current market terms while pursuing additional scale and pricing power through business combinations. Small Companies, Big Impact: Recapitalisations for M&A are particularly evident among smaller companies looking for material growth. On average, acquisitions added 49% to acquirers' EBITDA, while most combined groups' post-acquisition EBITDA was below EUR100m. Examples include the merger of Park Resorts and Park Dean in the UK, where the combined group's EBITDA is expected to grow by more than...
