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Written by 9:06 pm Manufacturing Sector News

CD&R-Backed Vialto Restructures to Reduce Debt After PwC Spinoff

(Bloomberg) — Vialto Partners, a provider of tax and immigration services, has agreed to restructure its debt a little more than two years after the company spun out of PricewaterhouseCoopers and was acquired by private equity firm Clayton Dubilier & Rice. 

A group including CD&R and existing lenders, including HPS Investment Partners, agreed to a deal that will inject $225 million of new equity into Vialto and slash around $700 million of its existing debt, according to a statement on Monday. HPS will become a minority equity owner as part of the deal, while CD&R will retain its majority stake, the statement said. 

Vialto ran into a cash crunch this year as a result of payments due to PwC, a high debt load and seasonal needs, according to a recent report from S&P Global Ratings. CD&R took the company private in 2022 from PwC where it was a business unit.

“Vialto has faced numerous impediments through its separation from PwC,” S&P wrote in the September report. “In our view, an initial failure to recognize the complexity of the separation process and to anticipate the needs of the stand-alone business have led to mounting operational challenges that the company is unable to overcome under its existing capital structure.”

Vialto has a $200 million revolving credit facility maturing in 2027, a $969 million term loan maturing in 2029 and a $400 million second-lien term loan maturing the year after, according to data compiled by Bloomberg.

The transaction is expected to close in early 2025, according to the statement. 

More stories like this are available on bloomberg.com

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