Research Update: France-Based Consumer Foods Producer Panzani Assigned Preliminary 'B' Rating; Proposed Debt Rated 'B'; Outlook Stable

In July 2021, funds advised by private equity firm CVC Capital Partners entered into exclusive discussions to acquire Panzani, the dry pasta, sauces, couscous, and semolina business, from the Spanish listed consumer foods group Ebro Foods (Ebro; not rated). Pimente Investissement SAS (Panzani; the holding parent company) is planning to issue a €340 million senior secured term loan B (TLB) to support the acquisition. We see S&P Global Ratings-adjusted debt leverage of about 6.0x and positive free operating cash flow (FOCF) in 2022-2023, reflecting the group's ability to pass on price increases thanks to the well-known Panzani brand and its strong market share in France. This is constrained by the small size of both the operations and the free cash

...- In July 2021, funds advised by private equity firm CVC Capital Partners entered into exclusive discussions to acquire Panzani, the dry pasta, sauces, couscous, and semolina business, from the Spanish listed consumer foods group Ebro Foods (Ebro; not rated). - Pimente Investissement SAS (Panzani; the holding parent company) is planning to issue a 340 million senior secured term loan B (TLB) to support the acquisition. - We see S&P Global Ratings-adjusted debt leverage of about 6.0x and positive free operating cash flow (FOCF) in 2022-2023, reflecting the group's ability to pass on price increases thanks to the well-known Panzani brand and its strong market share in France. This is constrained by the small size of both the operations and the free cash flow, as well as the high level of debt in the capital structure. - We assigned our preliminary 'B' long-term issuer credit rating to Panzani, and our preliminary 'B' issue and '3' recovery ratings to the proposed senior secured TLB. - The...

Research Update