Article
Evoca Lines Up PJT Partners and K&E, PIK Lenders Working With Houlihan Lokey and Milbank as Stakeholders Brace for Talks Amid Covenant Breach Risk at HoldCo Level
Relevant Items:
H1’26 Presentation
H1’26 Report
Q2’26 Transcript
Italian coffee machine producer Evoca has mandated PJT Partners and Kirkland & Ellis as financial and legal advisors, respectively, in anticipation of talks with sponsor Lone Star and creditors over its capital structure, sources told Octus. Holders of the group’s PIK debt are working with Houlihan Lokey and Milbank, the sources said.
The sponsor, which has been at the helm since 2016, is considering options for the business, sources noted. As reported, PIK holders – which include Carlyle and Park Square – have been having informal conversations since earlier this year over the potential equitization of their debt, which has ballooned to about €441 million from €210 million when it was raised in 2019.
The catalyst for the process to kick off is a risk of breaching the leverage covenant at the MidCo level, where the PIK debt is issued, after a deterioration of the performance at the operating company, sources said. The operating company, however, is not in default and has comfortable liquidity as well as some runway until its bonds mature April 2029, they added.
The PIK notes are attached to holding company LSF9 Canto Midco DAC, and their security pledges and guarantees were expected to sit outside Evoca’s restricted group, to which the company’s other debt is attached, according to the bonds offering memorandum in 2019.
Sources earlier noted that Lone Star may be amenable to an exit, given it has little, if any residual economic interest in the business, with less than €50 million of remaining equity after Evoca’s parent raised the €210 million PIK note in 2019, as reported.
Evoca reported solid headline metrics for the second quarter of 2026, showcasing year-over-year revenue growth of 14.1% to €94.2 million while adjusted EBITDA grew 38.8% to €22.6 million, signaling underlying demand recovery, although volume growth was supported by price reductions, particularly in the vending segment that posted 21.8% year-over-year growth.
While the results point to an element of more customers returning to capital expenditure on new machines, both revenue and EBITDA growth are built off particularly weak second-quarter 2025 bases. Second-quarter revenue and EBITDA in 2025 were down 28.8% and 46%, respectively, compared with the corresponding Q2’24 values. In Octus’ view, it is too early to call 2026 a recovery year after a poor 2025 as first-half 2026 revenue is down 1%.
Its €550 million of senior secured floating-rate notes due April 2029 are indicated at about 88, yielding about 13%, according to Markit.
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03/31/2026
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EBITDA Multiple
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(EUR in Millions)
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Amount
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Maturity
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Rate
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Book
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||||
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€80M Super Senior RCF due 2029 1
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–
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Feb-28-2029
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EURIBOR + 2.750%
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Total Super Senior Secured Debt
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–
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€550M Senior Secured FRNs due 2029 2
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550.0
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Apr-09-2029
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EURIBOR + 5.250%
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Total Senior Secured Debt
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550.0
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6.6x
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Lease Liabilities
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18.1
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Total Lease Liabilities
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18.1
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6.8x
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Total Debt
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568.1
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6.8x
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Less: Cash and Equivalents
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(40.2)
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Net Debt
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527.9
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6.3x
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Operating Metrics
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LTM Revenue
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338.8
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LTM Reported EBITDA
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83.5
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LTM Reorg EBITDA
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65.9
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Liquidity
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RCF Commitments
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80.0
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Plus: Cash and Equivalents
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40.2
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Total Liquidity
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120.2
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Credit Metrics
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Gross Leverage
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6.8x
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Net Leverage
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6.3x
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Notes:
LTM Reported EBITDA is the company’s adjusted EBITDA with certain restructuring costs, used for leverage calculations. Capital structure is post IFRS-16. Net debt excludes accured interests and fees on SSN and RCF. Capital structure is post IFRS-16. Evoca also holds PIK notes of around €420M at parent level, which are an unguaranteed senior obligation of the Parent 1. The RCF will mature at the earlier of Feb. 28, 2029 or six months prior to the maturity of the FRNs. It has a special lien (privilegio speciale) over the movable assets of the issuer as well. 2. Guaranteed and secured by the same collateral securing the RCF, albeit on a second ranking basis in accordance with the inter-creditor agreement. |
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