Financing in brief top news 2

Cinven has mandated Banca Intesa, Citigroup, JPMorgan, Lehman Brothers, RBS and Unicredito to arrange the debt backing its buyout of Avio. Carlyle and Finmeccanica are selling their respective 70% and 30% stakes in the Italian aerospace group to Cinven, in a transaction that gives Avio an enterprise value of €2.57bn. Once the sale is complete Finmeccanica will buy back a 15% stake in Avio, with the option to increase this to 30%. In addition Finmeccanica will retain the right to acquire the group’s space operations. Avio was first bought out from FIAT for €1.6bn in 2003 in a deal backed by €925m leverage loan. The group was also in the market earlier this year with a €550m senior crossover loan paying around 75bp over Libor. That facility was oversubscribed but not increased. Prior to this sale, Avio had been heading for a listing with JPMorgan, Lehman and Mediobanca believed to be mandated for the IPO.

  • Barclays and ING have won the mandate to arrange the £600m financing backing the buyout of Phones 4U by sponsor Providence Equity Partners. Syndication of the £600m MBO will be launched in September. Private equity houses Providence Equity Partners and Doughty Hanson recently purchased mobile telephone group Caudwell for £1.46bn. Founded as Midland Mobile Phones by John and Brian Caudwell, The Caudwell Group includes the Phones 4U chain, 20:20 Logistics, a handset distribution division, and Dextra, a mobile accessories distribution business. US-based Providence has taken control of Phones 4U, while Doughty Hanson now owns the distribution businesses.
  • Permira has bought a majority stake in independent UK production company All3Media from Bridgepoint, which backed an MBO of the company in 2003. Permira’s purchase values the company, which produces Richard and July and Holyoaks, at £212m, with an enterprise value of £320m. Bank of Scotland Corporate and Royal Bank of Scotland are arranging the £237m debt facilities supporting the acquisition. The £173 million of senior debt comprises a £34m seven-year term loan A with a margin of 225bp over Libor, a £51m eight-year B loan at 250bp, a £51m nine-year C loan at 3%, a £17m seven-year revolving credit facility at 225bp, a £15m seven-year capex facility at 225bp and a £5m 365-day production facility at 150bp. Subordinated debt comprises a £20 million nine-and-a-half-year bullet second lien facility paying 5% and a £44 million ten-year bullet mezzanine loan paying 4% – 5.25%.