Pretium Packaging Launches Strategic Restructuring to Boost Growth
Pretium Packaging, L.L.C. ('Pretium' or the 'Company') has announced a pivotal step in optimizing its capital structure. This strategic initiative is anticipated to decrease funded debt by more than $900 million, while also improving liquidity by over $175 million through a carefully crafted pre-packaged restructuring plan.
The agreement involves significant backing from Clearlake Capital Group, L.P., the Company’s equity sponsor, which includes a $50 million infusion of new equity. In addition, existing lenders have pledged more than $530 million in new near-term debt commitments. These elements collectively aim to fortify Pretium's financial foundation and support its ongoing growth trajectory.
Strengthening Financial Foundations
James Rooney, the Chief Executive Officer of Pretium Packaging, shared insights on the transformation journey the Company has embarked upon. He noted, 'Over the past few years, Pretium has made commendable advancements in manufacturing excellence, product innovation, and sustainability. These efforts have allowed us to achieve substantial growth, even amidst challenges faced by the packaging industry.'
Rooney emphasized that, under a newly de-leveraged capital structure, Pretium is positioned to invest more effectively in its products, workforce, and partnerships. The goal is not only to complete this restructuring but to emerge as a more robust organization, better equipped to seize future opportunities and provide exceptional value to customers and partners.
Support from Key Stakeholders
Clearlake’s continued partnership is a cornerstone of this strategic move. Co-Founder and Managing Partner José E. Feliciano and Partner Arta Tabaee expressed their commitment, noting that the investment showcases Clearlake’s belief in Pretium's capacity to navigate post-pandemic challenges successfully. They are determined to utilize Clearlake’s operational strategies to further support Pretium’s growth ambitions.
Naveen Shahani, a Principal at Clearlake, remarked on the consensual nature of this transaction. This collective confidence from Pretium and its lenders reinforces the belief that the Company is poised for ongoing success. Shahani is optimistic about the team’s ability to leverage the anticipated market opportunities.
Business Continuity During Restructuring
As Pretium implements this recapitalization process, the Company will continue its day-to-day operations. This commitment ensures that it can deliver top-notch sustainable packaging solutions to its clientele while maintaining full obligations to vendors and suppliers for goods and services received.
Currently, around 90% of Pretium’s secured lenders have expressed their support for this initiative, including key lenders like Wells Fargo. The Company aims to execute this process efficiently and rapidly, ensuring minimal disruption to operations.
Guidance from Advisers
To navigate this complex restructuring, Pretium has enlisted several advisors for expertise. Evercore serves as the investment banker, while Kirkland & Ellis provides legal counsel. FTI Consulting assists as the financial advisor. Meanwhile, the term loan lenders have chosen Moelis & Company LLC as their exclusive financial advisor and Milbank for legal counsel. Wells Fargo is receiving support from Morgan, Lewis & Bockius for legal services and Berkeley Research Group as a financial advisory.
About Pretium Packaging
Pretium is a leader in innovating and automating various rigid packaging technologies across numerous sectors including food, healthcare, personal care, and more. Sustainability is at the core of their business model; their multi-use packaging solutions include materials with up to 100% post-consumer recycled content, making them a preferred choice for environmentally-conscious customers. With 24 automated manufacturing facilities nationwide, Pretium focuses on quick turnaround times and a wide array of product offerings, ensuring they meet customer needs effectively.
About Clearlake
Founded in 2006, Clearlake Capital Group is a global investment firm that manages assets exceeding $90 billion across various financial strategies. The firm’s operational expertise spans technology, industrial, and consumer sectors, seeking to partner with adept management teams to drive value through an active operating approach.
Frequently Asked Questions
What is the focus of Pretium Packaging’s restructuring?
The restructuring aims to optimize Pretium's capital structure, reduce debt by over $900 million, and enhance liquidity by more than $175 million.
Who is providing support for Pretium's capital restructuring?
Clearlake Capital Group is a significant equity sponsor contributing a new $50 million equity investment, alongside existing lenders committing over $530 million in new debt.
What advantages does Pretium expect from the restructuring?
Pretium anticipates improved flexibility for investment in its products and services, allowing for enhanced growth and customer value delivery.
How will business operations be affected during the restructuring?
Pretium plans to continue regular business operations and fulfill all vendor obligations, ensuring no disruption in service or product delivery.
Who are the key advisors supporting Pretium during this process?
Pretium is guided by Evercore, Kirkland & Ellis, and FTI Consulting for various aspects of the restructuring and legal requirements.
