Provided solvency opinion to large information services provider
Provided solvency opinion to large information services provider
Solvency Opinion - Financing
Stout was engaged to advise the board of directors of a $3 billion information services provider to the consumer packaged goods and retail industries. The company, owned by private equity, was undertaking a recapitalization transaction whereby it was simultaneously raising new first and second lien debt and a new class B equity investment, repaying the existing first lien debt, and making a distribution to existing equity holders.
Stout's analysis relied on projected cash flows as well as trading multiples of comparable publicly traded companies and recent mergers and acquisitions of similar companies in order to assess the viability of the post-refinancing capital structure. In addition, we performed an analysis to determine the ability of the company to satisfy its post-refinancing debt obligations. Our work also included a sensitivity analysis in order to provide management with a sense of the company’s ability to continue satisfying debt obligations and operate the business without undue stress in the event of unexpected turbulence resulting in lower than expected future cash flows.
We issued an opinion that the company should remain solvent subsequent to the refinancing and return of $850 million of capital to shareholders. Our analysis was one factor that enabled the board of directors to recommend the structure with confidence and the company subsequently successfully undertook the transaction.