US Private equity giant Kkr is studying a potential merger between Italian Argenta group and Swiss Selecta group both active in thefood&beverage vending machine management sector, MF-Milano Finanza writes today.
Kkr is actually a significant creditor of both the groups. Last January the fund invested 100 million euros in shares and notes issued by Argenta (download here the press release). Kkr became then a minority shareholder of the Italian group which is controlled by Motion Equity Partners and allowed Argenta to repay its junior debts to Italian banks Unicredit and Mediobanca which was part of a financing facility the banks prepared in 2009 in support of a capital increase of the group. In 2013 Argenta reached 196.8 millioneuros in revenues and 43 millions of ebitda with a net financial debt of 216.8 millions.
Last June Kkr helped Swiss group Selecta to refinance mezzanine debt and avoid a debt restructuring. Kkr actually made a 220 million euros PIK loan (payment-in-kind loan withr capitalized interests at maturity) to the group which made 740 million euros in revenueslast year and is controlled by Allianz Capital Partners. The loan pays an annual 18% yield and provides Kkr with wearrant representing 35-40% of Selecta’s capital. At the same time Selecta issued 550 million euros in senior high yield bond to refinance the rest of its existing debt (download here the press release).
If a merger between Argenta and Selecta was to happen, the new group would become a dangerous competitor of UK group Pelican Rouge, once called Autobar, another big player in the vending machine sector which just concluded a significant debt restructuring of its debt and saw financing banks and hedge funds to became shareholders in a debt-to-equity swap deal. Former unique shareholder CVC Capital Partners left instead its investment (download here the press release).
Kkr is not listed among Autobar’s financing funds which instead are said to be York Capital Management, Angelo, Gordon & Co, Capula Investment Management and Blackstone’s GSO credit arm. While senior banks are Bnp Paribas, Hsbc, Nomura e Ing.
