The recovery of Atkins Nutritionals has been attributed to a US$425 million recapitalization. According to Thomson Reuters Loan Pricing Corp, this loan would be used to refinance existing loans and pay dividends to its shareholders.
According to estimates by Moody's, the dividend is said to amount to US$118 million. This is the windfall from the purchase made by new owner Roark Capital Group after just two years from the transfer from North Castle Partners. Furthermore, Moody's has rated Atkins as a 'B2' firm with a stable rating, subject to high credit risk. This is but a reflection of the firm's high leverage situation and 6.5x debt to EBITDA rating.
This current situation is a far cry from its 2007 situation, as the company was rescued by North Castle from its bankruptcy doldrums. Its previous peak in 2003 was at US$700 million in revenues and US$200 in EBITDA. From this high, the company fell after the tragic death of founder Robert Atkins from a head injuries from a slip and fall incident in New York.
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