Arxada's net leverage has risen from 6x in December 2021 to 9.1x in March 2024, driven by the weakness in the European chemicals industry.

The company's financing documents allow pro forma EBITDA add-backs (primarily cost-savings and synergies) for up to 24 months only, and are set to discontinue from December 2024. After this date, add-backs will need to translate into actual cash flow through higher EBITDA generation; otherwise, leverage will keep climbing.