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Italmatch Back on Sale?: Third Time's a Charm?
Laurent Vergnault - Senior Analyst, Chemicals, Paper & Packaging, CreditSights
EXECUTIVE SUMMARY
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There has been no significant change in the pricing of Italmatch’s senior secured notes due 2028 since the news came out.
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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.
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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.
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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).
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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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