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Vestcom to pay $95 mln dividend to shareholders, including Court Square

Court Square Capital Partners appears to have recouped its money on Vestcom International in less than two years.

Vestcom is in the market with a $335 million loan, according to Thomson Reuters Loan Pricing Corp. Most of that will be used to repay debt, but about $95 million will go to pay a dividend to its shareholders, Moody’s Investors Service said.

The deal will boost Vestcom’s leverage to 5.5x debt-to-EBITDA from its current 4x, Moody’s said. The $95 million distribution “slightly exceeds the cash invested by the current sponsor,” the ratings agency said.

[contextly_sidebar id=”XnqKiTRfQMIn5UEBG3xpKDkApsxXPkA6″]Court Square acquired Vestcom in December 2012 from the Stephens Group and Lake Capital. The deal was reportedly valued at $300 million. Court Square used a $197 million buyout loan to fund the acquisition, LPC said at the time.

New York-based Court Square is no stranger to dividends. The PE firm, founded in 2006 by former members of Citigroup Venture Capital Equity Partners, has received two separate distributions from Rocket Software, as well as a special dividend from CompuCom before it was sold to Thomas H. Lee Partners.

The Vestcom investment came from Court Square’s third fund, which closed at $3 billion in 2013, according to FTC flings. Court Square Capital Partners III LP, a young fund, is producing an IRR since inception of negative 1.37 percent as of Dec. 31, according to performance data from the Colorado Public Employees’ Retirement Association.

Little Rock, Arkansas-based Vestcom provides shelf-edge media, like shelf-strips or ad signs, for the retail industry.

Executives of Vestcom and Court Square could not immediately be reached for comment.

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