Overview
A five-year term loan was provided to a holding company with a 49.9% stake in a UK beverages joint venture, whose portfolio is led by a premium beer brand widely distributed in UK restaurants. The JV is co-owned with a global brewing group, which manages all operations, while the minority partner oversees strategy and brand development.
Investment Details
- 10% cash coupon and 7% PIK accrual, supplemented by an agreed exit fee payable at maturity
- Contractual minimum return / make-whole of 1.7x to ensure capital recovery
- Enhanced JV governance rights, including improved oversight provisions and expanded put-option protection mechanisms
- Look-through loan-to-value assessed at approximately 50–60% based on valuations at the time of investment
Investment Rationale
- Premium-Priced Brand Portfolio: Demonstrated pricing power and resilient positioning in core distribution channels.
- Low Operational Risk: All major operational functions handled by the global brewing partner under cost-plus arrangements.
- Strong Cashflow Generation: Consistent dividends facilitated rapid deleveraging and effective capital recovery.
- Clear Exit Path: A fair-market-value put option provided defined liquidity at maturity, with additional early-trigger protections.
Reading Signals.
Finding Value.
