Reportedly:
- Things have gone off plan for BlackRock’s investment in Alacrity.
- We may see more restructurings like this across the private credit market over the next two years.
- BlackRock has agreed to transfer its ownership to the company’s private credit lenders.
- BlackRock paid $560m for Alacrity in early 2023. It was bought through its long-term private capital strategy. This will be lost.
- BlackRock bought the company from Kohlberg & Co. in 2023.
- Alacrity’s debt in early 2023 – $1bn unitranche debt and $500m junior debt.
- The unitranche debt was from lenders including KKR & Co., Antares Capital and Blue Own Capital.
- The junior debt was from Goldman Sachs Asset Management.
- Changes – the unitranche private debt lenders (including KKR, Antares, Blue Owl) have agreed to convert 50% of their debt into equity. And they will provide $175m in new debt. This new debt will be in the form of a revolving credit facility and a term loan.
- The unitranche private debt investors will end up owning around 90% of the company. Goldman Sachs Asset Management will end up with the remaining 10%.
- Alacrity helps insurance companies with claims management work. They have suffered from worse demand and higher interest rates than hoped.
- Involved parties: Evercore (BlackRock’s advisor), Centerview Partners and AlixPartners (Alacrity advisors), Latham & Watkins and FTI Consulting (private credit firms advisors).