Italmatch Back on Sale?: Third Time's a Charm?

Laurent Vergnault - Senior Analyst, Chemicals, Paper & Packaging, CreditSights

EXECUTIVE SUMMARY
  • There has been no significant change in the pricing of Italmatch’s senior secured notes due 2028 since the news came out.
  • Among the possible scenarios, an LBO deal could result in a possible loss of around 3-4 points for holders of the 10% SSNs, whether they choose to exercise their 101 put option or keep their bonds.
  • However, the deal may not materialise for several months, if at all. Meanwhile, bondholders can hold on to their 10% SSNs and offset the potential loss of 3-4 points within the next six months.
  • Bondholders could see potential upside if Italmatch is acquired by a stronger company, although we believe this is less likely to occur (though not impossible).
  • We are still in the early stages of any potential Bain exit, and recent similar stories involving CABB and Nobian have yet to materialise, suggesting that this could be a lengthy process.

Relative Value

Private Equity firm Bain Capital was said to be considering selling Italian specialty chemicals producer Italmatch (FIREBC, B3/B/B) according to a report from Bloomberg yesterday (22 January 2025), citing people familiar with the matter. According to this report, Bain Capital is working with advisors to “explore options” for Italmatch, in a deal that could be valued at €1.5 bn.

We share our thoughts on a potential deal and possible scenarios, while updating our relative value assessment of its bonds (the 10% €300 mn and the FRNs €390 mn notes).

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