Marsico Capital Management reduced its debt by more than half through a restructuring that cut management’s equity ownership to less than 40%, said three people familiar with the deal.
The agreement with creditors shrank Marsico’s senior debt to about $500 million from $1 billion, and junior debt to about $200 million from $600 million, said the people, who asked not to be named as the process was private. Under the terms, the debt now matures in 2022, and creditors are eligible for distributions from management fees to service debt, they said.
This is the second time Marsico, which has about $31.2 billion in assets under management, has restructured since 2010. Marsico’s management will retain voting control even though its equity stake is declining from 51%, two of the people said.
Marsico CFO Neil Gloude said via phone that 100% of the senior and junior creditors agreed to the restructuring, without detailing the terms.
Founded in 1997 by CEO Thomas Marsico, the firm employed 65 people as of July 31, including an 18-member investment team, according to its website. Marsico restructured $2.7 billion debt in November 2010, persuading creditors to extinguish about $1.04 billion in exchange for a 19% equity stake, according to a statement at the time.
Marsico’s debt increased by $2.5 billion in 2007 as part of the management-led buyout of the firm from Bank of America. In the current restructuring, Houlihan Lokey advised the junior creditors, while Moelis & Co. advised Marsico, the people said.
Andrea Hurst, a spokeswoman for Moelis, declined to comment, as did John Gallagher, a spokesman for Houlihan.