It’s somewhat unexpected during a credit crunch to see a multi-billion-dollar buyout of a U.S. target, with a U.S. sponsor and U.S. bank leading the debt financing.
But that was the case when
The deal is noteworthy because of the number of U.S. players. Sure it’s around a 50/50 leverage ratio, but this is still something that’s not supposed to happen during the credit crunch. The basic explanation is that ConvaTec is an established business with high cashflows and low cyclicality.
Plus, you had a motivated seller in Bristol-Myers, which is trying to move most of its non-pharma assets.
It’s more a one-off than a roadmap, but is still a welcome sign for the lethargic LBO market. —Dan Primack