FCI in 700m recapitalisation rumour

Electrical and electronic connector manufacturer FCI is rumoured to be preparing for a recapitalisation. The deal, which is likely to be around €700m, should come to market in the next few weeks.

It is not yet clear if FCI, formerly Framatome Connectors International, intends to pay a dividend to sponsor Bain Capital. If so, it will be a remarkable change of fortune for the business, which was forced to rework its last €642.5m deal following a sluggish response from the market.

The restructured deal, which financed Bain Capital’s original buyout of the company early last year, went on to see good support on its B, C, second lien and mezzanine pieces. Banc of America Securities and Goldman Sachs were bookrunners.

The decision to recapitalise now is probably linked to the current trend of dropping the A tranche, focusing instead on institutional demand to structure using only bullet tranches. Last time around, FCI encountered resistance from banks to its A and pro rata elements as they included elements drawn in Hong Kong dollars, which cannot be traded in the European secondary market.

Although FCI is headquartered in France, it has significant Asian operations and required the ability to draw part of the deal in the Asian currency. It is unclear if the new deal will include Hong Kong dollars, although this seems likely.

FCI’s last deal comprised a €40m seven-year term loan A tranche at 225bp, a €150m eight-year term loan B at 275bp, a €150m nine-year term loan C at 325bp, a €65m term loan D at 550bp, a €85m seven-year revolver at 225bp and the €100m acquisition and capex line at 225bp. Leverage was 3.55x including the mezzanine.

FCI supplies interconnector components to numerous sectors, including the automotive, telecommunications and high-tech industries.