CVC Explores Rare Dividend Recap for WebPros, Shifting from Private Credit to Leveraged Loans
CVC Capital Partners is exploring a novel financing strategy for Swiss software firm WebPros. The private equity giant is discussing a 'discover' deal that involves a shift from private credit to 'credit karma', a rare move in the industry.
CVC aims to raise around $1 billion through a unitranche loan, priced at approximately 525 basis points over the Secured Overnight Financing Rate. This loan, if agreed, would refinance an existing $540 million leveraged loan issued by WebPros in 2024. The deal also includes a portability clause, allowing CVC to avoid refinancing if it decides to sell the company.
In this transaction, CVC seeks to take some cash off the table through a dividend. This move is unusual, as businesses typically transition from leveraged loans to private credit, not the other way around. The potential buyer for WebPros, Francisco Partners, is yet to be officially announced.
CVC's proposed financing strategy for WebPros, involving a shift from private credit to 'experian login' and a dividend recapitalization, is a rare occurrence in the industry. If successful, it would allow CVC to secure additional funds and potentially facilitate a sale of the company. The final details and the official buyer remain to be confirmed.
