Key Takeaways
- • Ares Management Corporation (NYSE: ARES) is the sole lender on £1 billion of available debt facilities to RSK Group, through funds managed by its European Direct Lending strategy, per a Business Wire announcement.
- • The transaction is described by Ares as the largest private credit-backed sustainability linked financing to date.
- • The facilities will refinance RSK's existing credit facilities and support its organic and inorganic growth plans.
- • The new debt includes an annual margin review tied to sustainability targets focused on carbon intensity reduction and health, safety and ethics management; RSK anticipates interest savings, though the amount was not disclosed in the release.
- • The deal marks a first for both businesses and extends a relationship in which Ares has been a financing provider to RSK for nearly three years.
Summary
Ares Management Corporation announced on August 9, 2021 that funds managed by its European Direct Lending strategy are serving as sole lenders on £1 billion of available debt facilities to RSK Group, the U.K.'s largest privately owned multi-disciplinary environmental business. According to the company, the transaction is the largest private credit-backed sustainability linked financing to date. Proceeds will be used to refinance RSK's existing credit facilities and to support its continued organic and inorganic growth.
The facilities include an annual margin review linked to the achievement of sustainability targets. These targets center on carbon intensity reduction and continual improvement in health and safety management and ethics, and are aligned with RSK's Corporate Responsibility and Sustainability Route Map, which draws on the company's sustainability pillars and the United Nations Sustainable Development Goals. RSK anticipates interest savings from the arrangement, although the release does not quantify them.
RSK, founded in 1989, is a fully integrated environmental, engineering and technical services group with more than 100 businesses and over 6,000 specialists. It is headquartered in the United Kingdom and has a presence in more than 40 countries. The group is led by founder and Chief Executive Officer Alan Ryder. According to the company's profile in the release, RSK's turnover rose from £209 million in the financial year ending March 2019 to a proforma estimate of over £600 million for the current financial year, and the group projects it will employ more than 10,000 people with annual revenue above £1 billion by 2025.
Michael Dennis, Co-Head of the Ares European Direct Lending strategy and Partner in the Ares Credit Group, described the financing as a first for both firms and said Ares has been a financing provider to Alan Ryder's team for nearly three years. Ryder said few firms have the scale, flexibility and ESG focus needed to provide a sustainability linked financing of this kind.
Ares is a leading global alternative investment manager with approximately $262 billion in assets under management as of June 30, 2021, including the acquisition of Black Creek Group, which closed July 1, 2021.
The facilities include an annual margin review linked to the achievement of sustainability targets. These targets center on carbon intensity reduction and continual improvement in health and safety management and ethics, and are aligned with RSK's Corporate Responsibility and Sustainability Route Map, which draws on the company's sustainability pillars and the United Nations Sustainable Development Goals. RSK anticipates interest savings from the arrangement, although the release does not quantify them.
RSK, founded in 1989, is a fully integrated environmental, engineering and technical services group with more than 100 businesses and over 6,000 specialists. It is headquartered in the United Kingdom and has a presence in more than 40 countries. The group is led by founder and Chief Executive Officer Alan Ryder. According to the company's profile in the release, RSK's turnover rose from £209 million in the financial year ending March 2019 to a proforma estimate of over £600 million for the current financial year, and the group projects it will employ more than 10,000 people with annual revenue above £1 billion by 2025.
Michael Dennis, Co-Head of the Ares European Direct Lending strategy and Partner in the Ares Credit Group, described the financing as a first for both firms and said Ares has been a financing provider to Alan Ryder's team for nearly three years. Ryder said few firms have the scale, flexibility and ESG focus needed to provide a sustainability linked financing of this kind.
Ares is a leading global alternative investment manager with approximately $262 billion in assets under management as of June 30, 2021, including the acquisition of Black Creek Group, which closed July 1, 2021.
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