Thrive Pet Negotiating Pro Rata Deal With Lenders for New Money

Thrive Pet Healthcare is negotiating a potential pro rata deal with its lenders, who may provide fresh money to the company, according to sources.

A majority of lenders are in confidential talks with the TSG Partner-backed vet clinic chain that has been contending with higher labor costs and volume headwinds, Octus previously reported.

Moody’s Investors Service revised the company’s outlook to negative last year, citing potential debt restructuring or default because of weakening profitability and an unsustainable capital structure.

The company’s third-quarter adjusted EBITDA dropped 18% year over year to $32 million, which was 38% below budget. Revenue came in flat at $316 million, missing the budget by 7%, Octus previously reported.

An ad hoc group of lenders to the company is working with PJT Partners as investment banker and Akin Gump as legal advisor, Octus, formerly Reorg, reported. The vet clinic chain has engaged Ropes & Gray as legal advisor and Evercore as financial advisor, as reported.

An estimated capital structure of the company is below:

The company’s $1 billion first lien loan due 2027 was quoted at 81/82 today, according to Solve. CLO lenders are HERE.

Thrive Pet Healthcare and sponsor TSG Consumer Partners did not respond to requests for comment.