That the coronavirus poses an enormous challenge for businesses is self-evident, but not every company or sector is suffering. Do-it-yourself stores, for example, are enjoying growth as people divert their time and money to home improvement.
From gloom to growth
For Maxeda DIY Group B.V. (“Maxeda”), the Benelux Do-it-yourself (“DIY”) market-leading holding company behind the Netherlands’ Praxis DIY chain and Brico and BricoPlanit in Belgium, the coronavirus period has turned out to be more positive, business-wise, than could have been expected at the outset. In the Netherlands, DIY stores were one of the few shopping options to remain open during the early days of the country’s partial lockdown, while in Belgium they were among the first to reopen. Result: Maxeda saw a significant increase in sales in the Netherlands in the first half of 2020, and in Belgium, where all DIY stores were closed for a month, sales have shown a strong recovery.
For Maxeda, what had begun as a potential threat became an opportunity – in this case an opportunity to refinance its existing debt with a new bond issue at a lower interest rate and lower amount for a longer period. The goal was to raise between €400 -€435 million and extend the term of the bond.
Speed, speed and more speed
Even more so than normally, speed was of the essence given the fluctuations in market sentiment. Maxeda’s advisors wanted to complete the entire process within a very tight timeline. This schedule, which was about a third of the normal refinancing timeframe, was necessary to issue the bond at what was felt would be the most favourable moment.
Recognising the scale of the challenge, Maxeda asked us for assistance in the process since we had previously done some work for the company. Specifically, Maxeda wanted us to smooth the due diligence process by assisting in the setting up of a virtual data room for the project. We would focus on the data room to ensure a smooth and efficient process so Maxeda and its advisors could focus on the content.
M&A and refinancing – the same but different
We decided to put a three-strong M&A team on the project. M&A because a refinancing project shares a lot of similarities with a sale or merger in terms of needs and process. Only the goal is different. Central to a refinancing project is to ensure potential investors have a complete and transparent overview of the company in question. And just as with an M&A transaction, there is a mountain of information to process – in Maxeda’s case, an estimated 5,000 to 6,000 documents.
Our first step was to together with Maxeda define Maxeda’s VDR structure and assistance in implementation of this within their chosen VDR solution. We then collected and selected relevant documentation (legal information and other documents that Maxeda and its advisors felt were relevant), indexed and renamed these documents, pre-reviewed them on relevant clauses and reported on these to Maxeda.
Once reviewed, the documents that made the grade were uploaded into the VDR. Our role also included reviewing and advising on the quality of the information in the data room and what corrective actions we felt were necessary. We also reported on the status of the documents and what information was missing.
In the end, Maxeda DIY Holding succeeded in raising €420 million and extending the term of the bond until 2026. That money, plus extra cash, enabled the company to repay the remainder of its old loan and, thanks to the strong demand, to reduce the interest rate on its new loan to 5.875%, down from 6.125% .
Discuss your M&A or refinancing needs
Would you like to know more about what we could do for you? Feel free to get in touch with Morad Kada to discuss, ask any questions you may still have or to talk in more detail about your needs. You can reach him at firstname.lastname@example.org