Marathon Asset Management and Webster Bank Provide Senior Secured Financing for the Acquisition of PK Companies

Rhea-AI Summary

Marathon Asset Management and Webster Bank have closed a senior-secured financing deal for PK Companies Group, to facilitate its acquisition by DC Capital Partners Management, LP. PK Companies, founded in 2004, specializes in non-discretionary, regulatory-driven specialty inspections, repair, maintenance, and safety services for industrial and heavy commercial facilities across the U.S. The company also offers technology-enabled solutions for asset integrity, mechanical inspection, and on-site safety compliance.

This transaction marks the first completed financing deal for Marathon and Webster Bank since announcing their Private Credit partnership. Marathon's Private Credit platform offers corporate, asset-based, and capital solutions, including senior and junior financings ranging from $50 million to $250 million. The partnership aims to provide tailored and creative financing solutions to middle market companies and private equity sponsors.

Positive

• Closing of senior-secured financing for PK Companies' acquisition
• First completed financing transaction for Marathon and Webster Bank's Private Credit partnership
• PK Companies' strong organic growth and industry-leading reputation
• Marathon's Private Credit platform offers financing solutions ranging from $50 million to $250 million

Negative

• None.

Insights

Financial Analyst

The partnership between Marathon Asset Management and Webster Bank to provide senior-secured financing for PK Companies' acquisition is a strategic move in the private credit space. This deal showcases the strength of their recently announced Private Credit partnership, demonstrating their ability to execute on middle-market transactions.

Key points to consider:

• Marathon's $23 billion AUM and Webster Bank's $76 billion in total assets provide a robust financial foundation for this venture.
• The focus on non-discretionary, regulatory-driven services in PK Companies suggests a stable revenue model, which is attractive for lenders.
• The involvement of DC Capital Partners, a reputable middle-market sponsor, adds credibility to the deal.
• The transaction aligns with the growing trend of private credit solutions in the middle market, potentially positioning Marathon and Webster for future deals in this space.

While this single transaction may not significantly impact Webster Bank's stock in the short term, it signals a strategic direction that could lead to increased revenue streams and market share in private credit lending, potentially benefiting long-term investors.

Market Research Analyst

This financing deal marks a significant milestone for Marathon and Webster's Private Credit partnership, potentially impacting their market positioning:

• The transaction targets the middle market segment, which has been experiencing growth in private credit demand.
• PK Companies' focus on regulatory-driven services aligns with increasing compliance requirements across industries, suggesting a robust market for such specialized services.
• The deal structure, involving both equity reinvestment by founders and private equity backing, indicates a balanced approach that could appeal to other potential clients.
• Marathon's expanded offering range ($50 million to $250 million) positions them competitively in the middle market lending space.

For investors, this partnership could represent a diversification of Webster Bank's revenue streams, potentially reducing risk and enhancing long-term growth prospects. However, the impact on stock performance will depend on the success and scalability of this partnership in securing and executing similar deals in the future.

NEW YORK--(BUSINESS WIRE)-- Marathon Asset Management (“Marathon”), a leading global credit manager with more than $23 billion of Assets Under Management, and Webster Bank, N.A. (“Webster Bank”), a leading commercial bank in the Northeast with $76 billion in total assets, are pleased to announce the closing of a senior-secured financing to PK Companies Group, LLC (“PK”) to help facilitate the acquisition by DC Capital Partners Management, LP (“DC Capital”). PK’s founders reinvested equity in conjunction with this transaction.

Founded in 2004, PK specializes in non-discretionary, regulatory driven specialty inspections, repair and maintenance, and safety services in support of industrial and heavy commercial facilities across the U.S. In addition to offering coatings, fireproofing, and soft-craft services, PK maintains a growing portfolio of technology-enabled software and hardware solutions that offer real-time transparency and comprehensive data-driven insights for asset integrity, mechanical inspection, and on-site safety compliance. PK’s focus on mission-critical services and regulatory compliance culminates in a highly sustainable revenue model.

“PK’s mission-critical offerings and keen focus on quality, safety, and customer service have resulted in strong organic growth and an industry leading reputation over their 20-year history,” said Curtis Lueker, Marathon’s Head of Direct Lending. “DC Capital, as an exceptional middle market sponsor with specialization in the Government and Engineering markets, will collaborate closely with the PK team to develop a comprehensive strategic plan for future growth.”

The closing of DC Capital’s acquisition financing for PK represents the first completed financing transaction for Marathon and Webster Bank since announcing their Private Credit partnership.

“Marathon's partnership with Webster Bank is powerful offering reliable, tailored, and creative financing solutions to middle market companies and private equity sponsors,” said Bruce Richards, Marathon’s CEO and Chairman. “Marathon’s leadership and expertise across our Private Credit programs: Direct Lending, Capital Solutions, and Asset-Based Lending, coupled with Webster Bank’s exceptional middle market sponsor lending program and broader commercial banking services, offers a highly differentiated suite of capabilities.”

Marathon’s Private Credit platform is designed as a one-stop shop, offering corporate, asset-based, and capital solutions, including senior and junior financings ranging from $50 million to $250 million.

About Marathon Asset Management:

Marathon Asset Management, L.P. is a leading global asset manager specializing in the Public and Private Credit markets with over $23 billion of assets under management. Marathon has dedicated investment programs spanning the spectrum of Private Credit: Direct Lending, Asset-Based Lending and Opportunistic as well as the spectrum of Public Credit. Marathon was founded in 1998 and is managed by Bruce Richards (Co-Founder & CEO) and Louis Hanover (Co-Founder & CIO) and employs more than 180 professionals, with 8 Partners. Its corporate headquarters are located in New York City, and it has offices in London, Miami, Los Angeles and Luxembourg. Marathon is a Registered Investment Adviser with the Securities Exchange Commission. For more information, please visit the company's website at www.marathonfund.com.

About Webster Financial Corporation

Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, a leading commercial bank in the Northeast that provides a wide range of digital and traditional financial solutions across three differentiated lines of business: Commercial Banking, Consumer Banking and Healthcare Financial Services, one of the country's largest providers of employee benefits and administration of medical insurance claim settlements solutions. Headquartered in Stamford, CT, Webster Bank is a values-driven organization with $76 billion in assets. Its core footprint spans the northeastern U.S. from New York to Massachusetts, with certain businesses operating in extended geographies. Webster Bank is a member of the FDIC and an equal housing lender. For more information, including past press releases and the latest annual report, please visit the company’s website at www.websterbank.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241017029314/en/

Marathon Asset Management Media Inquiries

Prosek Partners

pro-marathon@prosek.com

646-818-9283

Webster Financial Corporation Media Inquiries

Alice Ferreira

acferreira@websterbank.com

203-578-2610

Webster Financial Corporation Investor Inquiries

Emlen Harmon

eharmon@websterbank.com

212-309-7646

Source: Marathon Asset Management, L.P.

FAQ

What is the purpose of the senior-secured financing provided by Marathon Asset Management and Webster Bank (WBS)?

The senior-secured financing was provided to facilitate the acquisition of PK Companies Group, by DC Capital Partners Management, LP.

What services does PK Companies specialize in?

PK Companies specializes in non-discretionary, regulatory-driven specialty inspections, repair and maintenance, and safety services for industrial and heavy commercial facilities across the U.S. They also offer technology-enabled solutions for asset integrity, mechanical inspection, and on-site safety compliance.

How much financing does Marathon's Private Credit platform offer?

Marathon's Private Credit platform offers senior and junior financings ranging from $50 million to $250 million.

What is the significance of this financing deal for Marathon and Webster Bank (WBS)?

This deal represents the first completed financing transaction for Marathon and Webster Bank since announcing their Private Credit partnership, showcasing their combined capabilities in providing financing solutions to middle market companies and private equity sponsors.