(Finance) – Fitch Ratings assigned to The Doriaan Italian group leader in the production of tomato derivatives, sauces, legumes and fruit juices under the large-scale retail trade brand, a Long-Term Issuer Default Rating (IDR) expected for the first time at “B(EXP)” with a positive outlook. The rating agency also assigned its upcoming €500 million senior secured note issue with an expected instrument rating of “B+(EXP)”.
La Doria’s ratings primarily reflect his own niche dimension and the concentration of the retail customer base, which is partly tempered by its long-standing customer relationships and adequate operating profitability for a private-label food processing company. The IDR is also anchored by La Doria’s moderate leverage metrics and sustained positive cash flow (FCF).
According to Fitch, La Doria will be able to generate a modest growth in EBITDAsupporting Low single-digit FCF margins and leading to an adequate margin of leverage. The organic expansion of revenues and improvements in the EBITDA margin, also through internal efficiencies and product mix updates, will firmly place La Doria in the sensitivity for a upgrades to “B+” over the next 12-18 months, which is reflected in the positive outlook.
The rating agency recalls that the majority shareholders of La Doria are funds managed by Investindustrial and that the founding family holds a minority stake. Investindustrial gained control of the company in 2022 through a public-to-private leveraged buyout. The securities being issued are to be used to repay the outstanding financing for 2022 and to finance €125 million in distributions to shareholders.