FRP wraps up refinancing deal for foil manufacturer

Background

FRP were approached by one of the UK’s leading manufacturers of cling film, aluminium foil and baking papers for the food services industry, as well as a major supplier of hair foils, dispenser systems and alternative colour placement systems to the hair and beauty sector. The business, which exports to more than 20 countries, was acquired by a private equity sponsor, utilising vendor-backed loans to complete the deal. With the impending maturity of the vendor loans, the business was seeking a refinancing option which would provide a long-term financing structure for the group, and appointed FRP as debt adviser to seek proposals.

Action

FRP’s Debt Advisory team built a covenant model and supported the development of a debt briefing memo that was marketed to both bank and non-bank lenders. The team then provided side-by-side analysis of the offers received to assess suitability for the shareholders. FRP subsequently guided the shareholders through credit committee approvals and documentation with the preferred lender, advising on market-facing terms and the overall covenant package.

Outcome

The business secured highly cost-efficient senior debt financing with a UK clearing bank, refinancing senior loan notes in full, while allowing further distributions to shareholders. FRP’s Debt Advisory team secured concessions in both pricing and structure in the final approved terms, and added extra flexibility to allow for future shareholder distributions. The financing also provided additional headroom to undertake new product development and expand export sales into new international markets, which will support equity value growth in the coming years.