For Roundy's, Amend & Extend Means Dividend
Willis Stein & Partners' investment in Roundy's, a Midwestern supermarket chain, is about to return more money to its investors. The Chicago-based buyout firm is in the middle of negotiations to amend the terms of the company's debt, extending the maturity on its revolver and term loan from 2010 to 2012, a source familiar with the situation said. It's a move that's become increasingly common among private equity portfolio companies as they realize their capital structures, created in a time of cheap capital, are not sustainable. But in the case of Roundy's, which Willis Stein purchased in 2004, the amendment is not a result of capital constraints. Roundy's has excess capital on its balance sheet, which Willis Stein will absorb in the form of a dividend recap, the source said. The exact size of the recap is still in negotiations, but thanks to the excess cash, Roundy's debt load will not change as a result of the recap.
