KKR Provides Global Accounts Receivable Facility to Weber LLC

Rhea-AI Summary

KKR has provided a non-recourse accounts receivable financing of $200 million for Weber LLC to support the company's operations and strategic investments in long-term growth. The facility is collateralized by certain accounts receivables of Weber in the U.S. and international markets, with potential subsequent closes of up to $100 million across European markets expected in the first half of 2024. KKR Capital Markets acted as lead arranger and sole bookrunner.

Insights

Financial Analyst

The provision of a $200 million non-recourse accounts receivable financing to Weber LLC by KKR's private credit funds signifies a strategic move to inject liquidity into Weber's operations. This type of financing allows Weber to leverage its accounts receivables as collateral, thereby securing immediate capital without the risk of recourse, meaning Weber is not personally liable if the debt is not repaid. The impact on Weber's financial health could be substantial, as it provides them with the necessary funds to support ongoing operations and strategic growth initiatives without diluting shareholder equity.

From an investor's perspective, this financing arrangement can be seen as a positive signal that Weber is actively managing its working capital and has the confidence of institutional lenders. However, the terms of the deal, particularly the interest rates and fees associated with the facility, will be crucial in assessing the long-term cost to Weber and its impact on net income. Furthermore, the additional closes of up to $100 million across European markets indicate an expansion strategy that investors should monitor for its potential to increase Weber's market share and revenue streams.

Market Research Analyst

Weber's strategic investments in long-term growth, supported by KKR's financing, suggest a proactive approach to capitalizing on the outdoor cooking market's potential. This market has seen a surge in consumer interest, particularly in the context of increased home cooking trends and home improvements during the pandemic. The facility's focus on supporting operations and growth initiatives could enable Weber to innovate and potentially expand its product line or market reach.

It is important to consider how this financial maneuver positions Weber against competitors in the outdoor cooking space. The ability to secure non-recourse financing from a reputable entity like KKR could be indicative of Weber's strong financial standing and creditworthiness. For stakeholders, the evaluation of Weber's subsequent performance in utilizing these funds will be critical in determining the efficacy of this financial strategy and its impact on the company's market position.

Credit Risk Analyst

KKR's decision to provide a non-recourse financing facility to Weber LLC is indicative of a thorough credit risk assessment. The collateralization by Weber's accounts receivables suggests that KKR has confidence in Weber's ability to maintain a solid stream of receivables from its customers. However, the inherent risk of non-recourse financing is that the lender, KKR in this case, solely relies on the collateral's value for repayment.

It is essential to analyze the quality and diversification of Weber's accounts receivables that are being used as collateral. A concentration of receivables in a few customers or markets could increase the risk profile of the financing. Additionally, the performance of the outdoor cooking product sector, along with Weber's market share within it, will be critical in ensuring the stability of these receivables. Stakeholders should be aware of the potential risks associated with the receivables' collectability, as this could impact KKR's return on investment and Weber's financial stability.

NEW YORK--(BUSINESS WIRE)-- KKR today announced that its private credit funds and accounts have provided a non-recourse accounts receivable financing for Weber LLC (“Weber”), the global leader in outdoor cooking products, innovation, and technology, to support the company’s operations and strategic investments in long-term growth. The initial $200 million facility is collateralized by certain accounts receivables of Weber in the U.S. and international markets, with subsequent closes of up to $100 million across European markets expected in the first half of 2024. KKR Capital Markets acted as lead arranger and sole bookrunner.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240122504010/en/

KKR

Miles Radcliffe-Trenner or Julia Kosygina

+1 212-750-8300

Media@kkr.com

Source: KKR

FAQ

What type of financing did KKR provide for Weber LLC?

KKR provided non-recourse accounts receivable financing of $200 million for Weber LLC to support the company's operations and strategic investments in long-term growth.

What is the collateral for the financing provided by KKR?

The initial $200 million facility is collateralized by certain accounts receivables of Weber in the U.S. and international markets.

Who acted as the lead arranger and sole bookrunner for the financing provided by KKR?

KKR Capital Markets acted as lead arranger and sole bookrunner for the financing provided to Weber LLC.

How much additional financing is expected for Weber LLC in the first half of 2024?

Subsequent closes of up to $100 million across European markets are expected in the first half of 2024 for Weber LLC.