Atalian - comment

The restructuring of the proposed CD&R transaction places bondholders on a collision course with management. The assets now excluded from the deal currently have no equity value. Management must cauterise the open wound in the US and stabilise the France business. Atalian proposes a partial redemption of its €625m 5/2024 bonds, but it needs to extend the rest and refinance €575m of 5/2025 maturities. Atalian is on our shelf, but we may well take it down again.

The UK and Asian businesses will be disposed of for €735m => 8.1x EV/EBITDA (LTM basis). The remaining French/US and CEE business will be 8x or 6.2x if we exclude the US. The calculation includes €40m of head office and other central costs. If Atalian managed to walk away from the US business at a cash cost of €150m, the SUNs would be covered at an 8x multiple. However, management is not going to hand the business over to the bondholders.

https://atalian.com/wp-content/uploads/2022/12/LFA_CDR_FRA_FINAL2.pdf