Houlihan Lokey Advises Fabbrica Italiana Sintetici

Houlihan Lokey is pleased to announce that it has advised Fabbrica Italiana Sintetici S.p.A. (FIS) on its debut high-yield bond issuance. FIS has issued a 5.625% sustainability-linked bond for an aggregate amount of €350 million due August 2027. Proceeds from the issuance have been mainly used to refinance the group’s financial indebtedness (€270 million) and distribute an extraordinary dividend to the parent company, NineTrees S.p.A. (€40 million). As part of the transaction, the group also entered into a €50 million revolving credit facility agreement with a selected group of lenders. The facility will be mainly used to cover operating working capital requirements.

Founded in 1957 and based in Vicenza, Italy, FIS is a leading global contract development and manufacturing organization (CDMO) providing comprehensive, integrated, and highly customizable products and services in relation to a broad range of active pharmaceutical ingredients (APIs). In particular, the group offers a diversified portfolio of products, with 106 APIs and approximately 1,000 drug master files.

FIS operates three state-of-the-art production plants in Italy, supporting more than 300 customers in 70 countries—including 14 of the top 20 global pharmaceutical companies—through the entire API’s lifecycle, from early-stage clinical development to commercial-scale manufacturing. The group’s operating activities include four different business units: (i) Custom Synthesis, production of APIs for original patent-holder pharma companies; (ii) Generic, production of APIs for generic drugs; (iii) Animal Health (both generic and custom products); and (iv) R&D Services.

The transaction has resulted in an improved capital structure for the group, providing FIS with a more adequate financing platform to support the development of its business operations in the coming years, achieving the following key objectives:

• Increased financial flexibility to complete the group’s long-term investment plan, which will be critical to expand FIS’ production capacity and accommodate increasing demand from core clients.
• Fund one-off extraordinary actions aimed at streamlining the group’s working capital and inventory dynamics, achieving additional operating efficiencies that would ultimately improve operating margins.
• Distribute an extraordinary dividend to FIS parent company (NineTrees), with the objective of refinancing its financial debt and funding other initiatives.

Houlihan Lokey has advised the group in each step of the transaction, assisting FIS in structuring and negotiating every aspect of the debt refinancing and bond issuance process.

The sustainability-linked bond has been rated B3/B/B+ by Moody’s, Standard & Poor’s, and Fitch rating agencies, respectively.