OHA is the Left Lead Arranger of STV’s Private Unitranche Financing

Rhea-AI Summary

Oak Hill Advisors (OHA) arranges private financing for STV Group, Inc. in partnership with The Pritzker Organization (TPO) to support refinancing, acquisitions, and growth. OHA's $500 million facility aids in restructuring STV's capital and expansion plans, showcasing expertise in engineering and consulting industry.

Financial Analyst

The private financing arrangement for STV Group, Inc. by Oak Hill Advisors reflects a strategic move to consolidate STV's financial structure while enabling expansion through acquisitions. The involvement of a significant holder like OHA, with a portfolio exceeding $500 million, indicates a robust vote of confidence in STV's market position and future prospects. The refinancing component suggests an optimization of STV's capital costs, potentially improving its leverage ratios and interest coverage metrics, which are of keen interest to investors and analysts alike.

Furthermore, the partnership with The Pritzker Organization underscores a long-term strategic commitment, likely to enhance STV's operational capabilities and market reach. The focus on infrastructure, particularly in North America, aligns with current trends of increased public and private investment in this sector. This could lead to enhanced revenue streams and a stronger competitive stance for STV, benefiting stakeholders in the medium to long term.

Market Research Analyst

STV's positioning as a leading provider in the engineering and consulting domain, particularly within infrastructure and transportation, is timely given the growing emphasis on infrastructure development. The acquisition funded by this financing round could strategically broaden STV's service offerings or geographic presence. This aligns with the current industry trajectory, where diversification and scale are critical for maintaining a competitive edge.

It's also noteworthy that the transaction was sourced through a strategic direct lending partnership, indicating a shift towards alternative lending solutions in the capital markets. This may reflect broader trends in the financial sector where companies are seeking more flexible, tailored financing options outside traditional bank lending, potentially reshaping the landscape for corporate finance in this industry.

Legal Expert

The role of Oak Hill Advisors as the Left Lead Arranger in this transaction involves complex legal structuring to ensure compliance with financial regulations and to protect stakeholder interests. The legal intricacies of refinancing existing syndicated first lien capital structures require meticulous attention to detail to avoid subordination issues that could affect creditor priority. Additionally, the acquisition component of the financing necessitates rigorous due diligence to mitigate risks associated with asset integration and to ensure the transaction aligns with antitrust laws.

Given the scale of the facility, exceeding $500 million and the involvement of multiple parties including BMO Capital Markets, the legal framework governing this transaction must be robust to facilitate the long-term growth plans for STV. The strategic partnership between OHA and TPO further adds layers of contractual obligations that must be carefully crafted to ensure mutual benefit and operational synergy.

New York, New York, March 21, 2024 (GLOBE NEWSWIRE) -- Oak Hill Advisors (“OHA”) served as the Left Lead Arranger for the private financing of STV Group, Inc. (“STV”), which is partnered with The Pritzker Organization (“TPO”). STV is a leading provider of engineering and consulting services focused on infrastructure and transportation projects across North America. The financing proceeds are being used to support a refinancing of STV’s existing syndicated first lien capital structure, fund an acquisition and help support STV’s continued growth. OHA is one the largest holders of the total facility, which is over $500 million in size.

OHA’s strong relationship with TPO positioned it to source and engage early with the borrower to structure an optimal financing solution, having recently served as Lead Arranger for the private unitranche refinancing of Mammoth Holdings, also partnered with TPO. Additionally, OHA was a natural partner given its deep experience investing in the engineering and consulting industry.

“With its solution-oriented leadership and ability to show up in scale, OHA is a valued strategic partner as we progress on the development of our platform investments,” said Larry Tarschis, Managing Director at TPO. “We look forward to collaborating with OHA to advance the long-term growth plans for STV, with a focus on expanding its geographic footprint, service lines and continuing to support the significant growth in infrastructure investment.”

This transaction was sourced through OHA’s strategic direct lending partnership with BMO Capital Markets (“BMO”), who served as Administrative Agent and Joint Lead Arranger.

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About OHA: Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience. OHA works with institutions and individuals and seeks to deliver a consistent track record of attractive risk-adjusted returns. The firm manages approximately $63 billion of capital across credit strategies, including private credit, high yield bonds, leveraged loans, stressed and distressed debt and collateralized loan obligations as of December 31, 2023. OHA’s emphasis on long-term partnerships with companies, sponsors and other partners provides access to a proprietary opportunity set, allowing for customized credit solutions across market cycles.

With over 400 experienced professionals across six global offices, OHA brings a collaborative approach to offering investors a single platform to meet their diverse credit needs. OHA is the private markets platform of T. Rowe Price Group, Inc. (NASDAQ – GS: TROW). For more information, please visit oakhilladvisors.com.

About STV: Founded in 1912, STV is a leading national infrastructure-focused professional services firm, providing engineering, architectural, planning, environmental, program management and construction management services for transportation systems, buildings, water, energy and other facilities. Headquartered in New York City, the company has more than 55 offices across North America. The firm is ranked 37th in Engineering News-Record’s Top 500 Design Firms survey and is 11th in its transportation category. In 2022, STV signed the Equity in Infrastructure Project (EIP) Pledge, becoming one of the first architecture, engineering and construction (AEC) firms to commit to advancing equity in infrastructure. Learn more at stvinc.com.

About TPO: The Pritzker Organization is the merchant bank for the business interests of the Tom Pritzker family. Additional information can be found at pritzkerorg.com. 

What is the significance of Oak Hill Advisors (OHA) serving as the Left Lead Arranger for the private financing of STV Group, Inc.?

OHA's role in arranging private financing for STV demonstrates its expertise and strategic partnership with The Pritzker Organization (TPO) to support STV's growth and development plans.

How will the financing proceeds be utilized by STV Group, Inc.?

The financing proceeds will be used for the refinancing of STV's existing syndicated first lien capital structure, funding an acquisition, and supporting continued growth initiatives.

What is the total size of the facility provided by Oak Hill Advisors (OHA) for STV Group, Inc.?

OHA's facility for STV amounts to over $500 million, highlighting a substantial financial support for STV's operations and expansion.

Who is Larry Tarschis and what role does he play in the partnership with Oak Hill Advisors (OHA)?

Larry Tarschis, Managing Director at The Pritzker Organization (TPO), acknowledges OHA as a valued strategic partner, emphasizing OHA's leadership and scale in supporting STV's growth plans.

What is the nature of the partnership between Oak Hill Advisors (OHA) and BMO Capital Markets in this transaction?

OHA's strategic direct lending partnership with BMO Capital Markets served as a source for this transaction, with BMO acting as the Administrative Agent and Joint Lead Arranger.