Renta Group ratings confirmed for €350M buyout bond deal

Corporate and secured ratings are confirmed at B/B2/B+, all stable, for Renta Group Oys planned €350 million, five-year (non-call two-year) secured bond issue. The announcement follows an investor call on Jan. 24 via global coordinator J.P. Morgan and Nordic coordinator Nordea.

Proceeds from the offering will fund an IK Partners-led buyout of the Nordic rental-equipment group, which was agreed in November 2021 for an enterprise value of €750 million. The takeover will be supported by €310 million of sponsor equity and a €75 million 4.5-year super-senior revolving credit facility, with proceeds from the financing also set to repay €200 million of existing Renta Group senior facilities.

The transaction, to be issued via Ren10 Holding AB, is being marketed off pro forma adjusted EBITDA of €89 million for the 12 months ended September 2021 and net sales of €274 million for the same period.

In assigning its B rating, S&P Global Ratings said in a report published today that it forecasts revenue growth of roughly 4% to 7% for 2022 and adjusted debt to EBITDA of 3.9x-4.1x. However, the agency expects lower leverage of about 3.6x for 2023 and does not expect Renta Group to make sizable acquisitions in the next 12 months.

Ratings highlights the firm's low geographical diversification compared with peers such as Loxam or Boels, with more than 95% of revenue stemming from the Nordic region. The agency also noted the company's cyclical end markets, such as construction and industrials, as well as its high capital expenditure requirements.

Renta was founded in Finland in 2016 and operates across Sweden, Denmark, Norway and Poland.

Deutsche Bank, DNB Markets and SEB are additional bookrunners on the transaction.