Research Update: International Design Group Rated Prelim 'B' On Consolidation Of Flos, Louis Poulsen, And B&B Italia; Outlook Stable

Private equity groups Investindustrial and The Carlyle Group have created International Design Group SpA (IDG), consolidating Flos, Louis Poulsen, and B&B Italia, three leading companies in the high-end design market. Investindustrial and Carlyle will jointly own a 90%-95% stake in the group, while IDG's senior management will own the remaining 5%-10%. As part of the transaction, IDG will issue €720 million senior secured notes and a €100 million super senior revolving credit facility, and shareholders will contribute approximately €1 billion in common equity. We are assigning our preliminary 'B' ratings to IDG and to the proposed €720 million senior secured notes. The stable outlook reflects our view that the group will successfully consolidate the three entities, maintaining free operating cash

...+ Private equity groups Investindustrial and The Carlyle Group have created International Design Group SpA (IDG), consolidating Flos, Louis Poulsen, and B&B Italia, three leading companies in the high-end design market. + Investindustrial and Carlyle will jointly own a 90%-95% stake in the group, while IDG's senior management will own the remaining 5%-10%. + As part of the transaction, IDG will issue 720 million senior secured notes and a 100 million super senior revolving credit facility, and shareholders will contribute approximately 1 billion in common equity. + We are assigning our preliminary 'B' ratings to IDG and to the proposed 720 million senior secured notes. + The stable outlook reflects our view that the group will successfully consolidate the three entities, maintaining free operating cash flow generation above 25 million, adjusted debt to EBITDA of 6.0x-6.5x, and EBITDA interest coverage of 2.5x-3.0x in 2019....

Research Update