Research Update: Pixelle Specialty Solutions LLC Upgraded To 'B' On Acquisition Of Two Specialty Paper Mills, Outlook Stable

U.S.-based Pixelle Specialty Solutions LLC has entered into a definitive agreement to acquire two specialty paper mills from Verso Corp. for about $365 million. The company will fund the acquisition with about $50 million of cash on hand, a $255 million incremental term loan, and an about $80 million cash equity contribution from Lindsay Goldberg. We are raising our issuer credit rating on Pixelle to 'B' from 'B-'. At the same time, we are raising our issue-level rating on the company's term loan and revolver to 'B' from 'B-'. The '3' recovery rating remains unchanged. The stable outlook reflects our expectation for Pixelle to report EBITDA of between $120 million and $135 million in 2020, which incorporates its acquisition of

...- U.S.-based Pixelle Specialty Solutions LLC has entered into a definitive agreement to acquire two specialty paper mills from Verso Corp. for about $365 million. - The company will fund the acquisition with about $50 million of cash on hand, a $255 million incremental term loan, and an about $80 million cash equity contribution from Lindsay Goldberg. - We are raising our issuer credit rating on Pixelle to 'B' from 'B-'. - At the same time, we are raising our issue-level rating on the company's term loan and revolver to 'B' from 'B-'. The '3' recovery rating remains unchanged. - The stable outlook reflects our expectation for Pixelle to report EBITDA of between $120 million and $135 million in 2020, which incorporates its acquisition of two specialty paper mills and its supporting leverage of at or below 4x EBITDA....

Research Update