Avison Young Lands Milestone Recapitalization

The company has closed the deal that reduces its financial obligations by more than half.

Avison Young’s future just cleared a bit. After deleveraging its corporate finances, the company has closed a comprehensive recapitalization that was approved by all financial partners. The deal reduces the firm’s financial obligations by more than half and secures additional capital for future deployment.

The transaction also entails the formation of a smaller, independent board of directors, led by Mark Rose as chair. The board will downsize from 11 members to just five and will have two independent directors appointed by the company, besides Rose, and two appointed by its lenders, according to Bisnow. The members of the board will be announced in the following weeks.

The company’s leadership will continue to hold a substantial majority of ownership in the organization. Anticipating a review by U.S. credit rating agencies, the firm foresees updated ratings reflecting its improved financial standing following the recent transaction.

The agreement is expected to enhance equity value for both shareholders and principals, while also aligning with compensation based on market standards.

Centerview Partners LLC, Kobre Capital LLC and Long Castle Advisors Corp. acted as financial advisors, while Stikeman Elliott LLP, McDermott Will & Emery LLP and DLA Piper LLP provided legal counsel. Lazard Frères & Co. served as the investment banker, and Paul Hastings LLP acted as legal advisors for the syndicated lender group. Additionally, C Street Advisory Group was communications advisor for Avison Young.

Avison Young’s resilience amid financial challenges

In February, S&P Global Ratings downgraded Avison Young’s issuer credit from “CCC” to “SD” and lowered the issue-level rating on a $325 million senior secured term loan to “D” from “CCC-“. However, Rose denied the default notation, saying that the non-payments were part of an existing agreement that would help inject additional funding into the company, Real Estate News Exchange reported.

A month earlier, the company acquired Madison Marquette’s specialty leasing, retail property management, marketing and leasing businesses totaling more than 6.1 million square feet of facilities across the country.

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