Pari Passu Newsletter

Jokes aside, it is fascinating how companies supplying to the Government quickly went from being considered a gem to being considered an above-average risk business What is your view? Do you think having the US Government as a large customer is a risk today?

Day #15 of "Readers Pick Restructuring Topic" I post daily restructuring highlights If the post gets 50 likes, the newsletter will do a dedicated deep dive into the transaction Today, we have the upcoming distress of Tropicana See previous Pari Passu Newsletter deep dives - https://lnkd.in/eEwvs-dg

The next time you want to start an investment firm, remember your first fund should look like something like this Fund I: 45x (forty five!!) Fund II: 12.4x Out of this world

Great Free Recruiting Event! Whether you are - an undergrad or MBA student looking for an elite internship - a recent grad aiming to transition into investment banking or make a lateral move between banks - someone simply curious about the world of Wall Street behind closed doors You should join this great our Investment Banking Recruiting Office Hours event! Spots are limited, register now! https://lnkd.in/eCtnwSS9

Paul Singer - Elliott Management Founder - telling the story of the Argentina Activist Campaign ?? How he made $2 billion from Argentina's economic collapse over 15 years “I was not patient, I had nowhere to go”

GIVEAWAY ?? | PLURALSIGHT DEEP DIVE THE FIRST PRIVATE CREDIT RESTRUCTURING Pluralsight is called the Restructuring Deal of 2024 and represents a cocktail of restructuring, private equity, and private credit, you have to understand it This is why this is a big deal: 1) It is a beautiful case of how leverage can lead to big troubles for private equity backed-companies even if the company keeps performing (see image below) 2) It is the first liability management exercise done against private credit lenders 3) Makes you understand the way distressed companies decide which restructuring alternative is the best value accretive The full writeup is behind paywall on the Pari Passu Newsletter Website, but today you can get it for free! If you want to get (i) like this post, (ii) comment "Pari Passu", (iii) then send me a message saying you want to get the Pluralsight Deep Dive - I will reply and give you access. I will check that you commented before sharing! WHY THIS IS A BIG DEAL: While the liabilities management exercises landscape is constantly evolving, there is one thing that has always been constant about these maneuvers: they all involve public debt. That was true until earlier this year, when Pluralsight, a Vista take-private, engaged in a drop-down maneuver Let's see a preview BACKGROUND: ?In 2021, Vista agreed to purchase Pluralsight in a take-private deal for $22/share and an estimated value of $3.5bn. This transaction included $1.5bn of debt (~40% LTV), with over $1bn coming from direct lenders ($1.175bn recurring revenue term loan and a $100mm RCF) for an implied $2bn of equity. HOW DID IT GET INTO TROUBLE: When Vista Bought out Pluralsight, it was reported that the company was generating $390mm in ARR. Assuming a 10% CAGR, this leads to $472mm of ARR in 2023. In 2023, it was reported that Pluralsight had a 26% EBITDA margin, meaning it would generate $123mm in EBITDA. The remaining $325mm was not issued by private lenders. The specific interest rates on those pieces of debt were not publicly disclosed. Assuming the public loan rates were 200bps cheaper than the private credit rates, the interest expense on the old debt is $37mm (325mm debt * 11.5%). This total interest expense would be $196mm. RESTRUCTURING: ?Pluralsight engaged in a dropdown maneuver, where it moved its IP... PRIVATE CREDIT CONSEQUENCES: This is where it gets interesting as there are clashing views… ___ Thank you to?Daloopa for sponsoring this post. Daloopa lets you access complete, accurate, and fast financial data while saving you time. Check them out: https://daloopa.com/ ___ This article was originally published in the Pari Passu Newsletter, subscribe now to never miss future pieces (articles go behind paywall after publication). Subscribe here: https://lnkd.in/eTpr5JCc __ Raising Capital? Shoot me a DM! I am looking to deploy a few checks into private markets opportunities If your company / fund is raising, I would love to see the learn more!

Kelly Granat (Lone Pine Co-CIO) shares her view on the impact of pods on fundamental investing “You read the release, and on a fundamental basis I can give you the answer but that might be entirely wrong” “For those of us who have duration on our side and are taking a long term view, there is dislocation that are not fundamental that we can capitalize on”

Day #13 of "Readers Pick Restructuring Topic" I post daily restructuring highlights If the post gets 40 likes, the newsletter will do a dedicated deep dive into the transaction Today, we have the case of Franchise Group See previous Pari Passu Newsletter deep dives: https://lnkd.in/eEwvs-dg

Post Preview - Unions and Chapter 11 Unions have been making headlines recently, from the Park City Ski Patroller Strike to the inflation bomb that could have been a prolonged International Longshoremen’s Association strike [10]. Acronyms like CBA, NLRA, and NLRB are often tossed around by talking heads all the time, but rarely explained. For those who are just trying to make sense of it all, we aim to provide a clear and concise overview of what unions are and how they are treated in the Chapter 11 Process. To further your understanding of these concepts, we’ll then dive into two cases that highlight how unions are treated in the Chapter 11 process. Both examples demonstrate the complexities of balancing workers' rights and the financial future of a company, with one showing how Chapter 11 can be used as a tool to provide favorable outcomes for all involved, while the other serves as an example of some of its shortcomings —- Click below to join 20,000+ investors / lawyers from firms like Apollo, KKR, Farallon, Point 72, Kirkland & Ellis, Skadden, and many more! https://lnkd.in/eUiB-NaE Pari Passu articles go behind paywall one week after being published. Make sure to subscribe now to get this and all future articles for free! Bonus: If you cannot wait and want to get the article today, comment "Now" and send me a message, I will pass you the document for free!

Day #12 of "Readers Pick Restructuring Topic" I post daily restructuring highlights If the post gets 40 likes, the newsletter will do a dedicated deep dive into the transaction Today, we have the financing of Thames Water See previous Pari Passu Newsletter deep dives: https://lnkd.in/eTpr5JCc