The plus-size retailer is in the market with a $160 million loan that will be used to pay the distribution, Thomson Reuters Loan Pricing Corp. reported. Goldman Sachs is leading the financing, LPC said on March 20.
Proceeds of the loan, including a $20 million add-on and about $40 million in balance sheet cash, will be used to fund a $215 million dividend to company’s shareholders and pay transaction fees, Moody’s Investors Service said in a March 11 note.
Fullbeauty, formerly known as OneStopPlus, was acquired in February 2013 by Charlesbank and Webster for $522 million, including $157 million of equity.
New York-based Fullbeauty specializes in selling plus-size clothing — sizes 12W to 44W — for men and women nationally through catalogs and e-commerce sites. Brands include Woman Within, Jessica London and KingSize.
The $214 million dividend is the third since February 2013, Moody’s said. Fullbeauty paid out dividends in 2014 and in 2013, peHUB has reported. The retailer will have issued about $500 million in dividends since its sale to the private equity firms, Moody’s said.
Moody’s said the dividend payments represent greater than 3.5 times the initial equity investment. But due to Fullbeauty’s strong operating performance, the ratings agency estimates that the company’s “pro-forma leverage through September 30, 2014, will be around 6x and should drop to the mid-to-low 5x range by the end of 2015, driven by additional top line and EBITDA growth.”
Doug Steiner, Webster’s managing partner, said via email that Fullbeauty’s dividends “have been possible as a result of the outstanding earnings growth achieved by the management team at Full Beauty Brands. The investors (including CharlesBank, Webster and the many employee shareholders) are extremely proud of the company’s performance.”
Executives for Fullbeauty and Charlesbank couldn’t immediately be reached for comment.