...- Private-equity firm Advent International and specialty chemicals company Lanxess AG have formed Envalior, a global engineering materials producer with about 3.8 billion of sales in 2022, by combining the acquired DSM Engineering Materials (DEM) with Lanxess' high performance materials business (HPM). - The transaction was funded by a 2.9 billion senior secured term loan B (TLB), 676 million of payment-in-kind (PIK) notes, and 200 million of preferred equity certificates (PECs) provided by Lanxess. - We view the initial capital structure as highly leveraged, with adjusted debt to EBITDA estimated at almost 9.0x in 2023 (roughly 8.5x without PECs). - We assigned our 'B' long-term issuer credit rating to Envalior's holding company SCUR-Alpha 1503 GmbH and 'B+' issue rating to the senior secured loans. - The stable outlook reflects our expectation of moderate volume growth and stable EBITDA margins this year, with debt to EBITDA set to swiftly improve to below 8x (below 7.5x without PECs)...
