XSYS Plans Substantial TLB Add-On Launch in September

Reporting: Jihye Hwang

German flexographic and letterpress products supplier XSYS is preparing to bring a substantial add-on loan transaction in September, according to sources.

The deal will be sizable for an add-on, and will be executed on a standalone basis, though the size is unlikely to exceed €400 million, sources said.

Proceeds of the additional debt are not expected to be used for debt repayment, refinancing or working capital, sources added.

The company priced a €435 million seven-year first-lien senior secured term loan B in 2021 at Euribor+425 bps with a 99.75 OID to back its buyout by private equity firm Lone Star from troubled printing and packaging supplier Flint Group. The facility, which is rated B2/B- by Moody’s/S&P, is quoted at around par, sources said.

XSYS also preplaced an €80 million second-lien term loan due 2030, and Lone Star’s indicative equity for the buyout was about €266 million according to Fundamentals by Reorg.

Flint sold XSYS to Loan Star at 9.2x pro forma Enterprise value/EBITDA (pre-IFRS 16) at the time, according to Fundamentals, which is low compared with the 11.4x multiple Kodak generated for the sale of its flexographic packaging division Miraclon to Montagu Private Equity, completed in 2019.