LBO Syndications

Abbot Group

Target nation: UK

Date announced: 07/12/07

Deal type: LBO

Acquirer: First Reserve

Total value: £906m

Arrangers: Goldman Sachs

Financing: US$2.16bn

Global co-ordinator and bookrunner Goldman Sachs and bookrunners Bank of Scotland, Lloyds TSB and RBS have closed syndication of the senior facilities backing First Reserve’s acquisition of the oil services business Abbot Group. The deal went free to trade in the secondary market on Friday.

Syndication included a successful structural flex, which cut US$75m from the original US$615m bridge to high-yield bonds – the same amount added to senior facilities.

Post flex the facilities feature US$1.625bn of senior tranches, including a term loan A paying 275bp over Libor, a term loan B paying 350bp and term loan C paying 375bp. A seven-year bullet funded synthetic letter of credit facility pays 275bp, as do unfunded tranches.

The financing also includes a US$540m equivalent 10-year secured bridge loan facility, which sources away from the deal said is priced as quasi mezzanine, reduced from an original US$615m.

The reverse flex was achieved in exchange for increased fees and on the back of strong demand for senior paper. A 100bp fee for a US$40m ticket was increased by 20bp, with 15bp added to the 85bp fee for a US$25m ticket.

The successful completion of a large deal was widely welcomed across the market, though the deal was for an unusually strong credit in a defensive sector.

Abbot Group is a UK-based oilfield services company that owns and operates onshore and offshore drilling rigs and provides drilling services to third parties. It operates in Europe, the Middle East, Russia, North and West Africa, and the Caspian Region.

Sponsor First Reserve is the leading private equity firm specialising in the energy industry, with more than US$12.5bn under management.

Alliance Boots

Target nation: UK

Date announced: 25/04/07

Deal type: LBO

Acquirer: KKR

Total value: £10.0bn

Mandated arrangers: Deutsche Bank and others

Financing: £9.02bn

Alliance Boots’ debt arrangers Deutsche Bank, JPMorgan, UniCredit (HVB), Barclays, Citi, Banc of America, Merrill Lynch and RBS are lining up a deal to sell a substantial senior sub–tranche of the £9.02bn package supporting KKR’s and Stefano Pessina’s buyout of Alliance Boots.

However, confusion surrounds exactly what is on offer as not all of the debt is for sale and not all the underwriters are selling. Sources away from the deal said that up to 50% of a £5.05bn term loan B has been prepared for sale. There are also suggestions that an anchor investor is in the process of taking a major position on the £1bn second lien debt.

The senior piece in play has been re–tranched into three sub–tranches, one of which will be sold down in the immediate term.

Alliance Medical

Target nation: UK

Date announced: 05/11/07

Deal type: Secondary buyout

Acquirer: DIC

Total value: £600m

Mandated arranger: BoS and DKIB

Financing: Unknown

Mandated lead arrangers Bank of Scotland and Dresdner Kleinwort have launched general syndication of senior facilities backing the acquisition of Alliance Medical by Dubai International Capital (DIC), and Bridgepoint Capital, which has joined as a partner sponsor.

Senior debt is split between a £32m seven-year amortising TLA paying 225bp over Libor, a £110m eight-year bullet TLB paying 337.5bp, a £110m nine-year bullet TLC paying 387.5bp, a £100m seven-year capex facility paying 300bp and a £20m seven-year revolver paying 225bp.

A £100m 10-year mezzanine tranche has been placed with close relationship investors, and pays 950bp. Leverage is 4.2x through senior and 5.9x in total. The sponsors are committing 40% equity.

General syndication follows an earlier phase at the end of 2007 which targeted existing lenders and DIC relationship banks.

UK-based Alliance Medical provides a range of diagnostic imaging services used in hospitals across Europe. The business had reported revenues of £160m in the year to the end of March 2008.


Target nation: Norway

Date announced: 07/02/08

Deal type: LBO

Acquirers: 3i

Total value: US$395m

Mandated arranger: GE

Financing: Unknown

Global co-ordinator GE and fellow underwriters Calyon, Danske Bank, European Capital Financial Services and HSH Nordbank have wrapped up syndication of debt backing the US$395m buyout of Active Pharmaceutical Ingredients (API) a Norway-based unit of Alpharma.

The bulk of debt was underwritten on a take-and-hold basis by the underwriters, with a soft syndication of a portion of the deal targeted at banks that had originally backed unsuccessful bidders in the auction for the business.

API is a developer and supplier of specialist active pharmaceutical ingredients. The unit has 700 employees and had US$138.7m in revenues in the first nine months of 2007.


Target nation: US

Date announced: 02/05/08

Deal type: LBO

Acquirers: Nordic Capital and Avista

Total value: US$4.1bn

Arranger: JPMorgan

Financing: US$2.1bn

Nordic Capital and Avista Capital Partners’ US$4.1bn buyout of ConvaTec from Bristol-Myers Squibb is set to bring Europe’s largest buyout since the credit crisis effectively closed the market last summer. Drawn debt will total US$2.1bn and the deal is set to emerge with an A/B/C structure along with a sizable mezzanine tranche.

JPMorgan is mandated as global co-ordinator, bookrunner and mandated lead arranger, with Bank of Ireland, GE, Dresdner Kleinwort and UniCredit also bookrunners with HSH Nordbank, Mizuho Corporate Bank and SEB joining.

ConvaTec is US-based, though the deal will be sold into the European bank market to take advantage of Nordic Capital’s bank relationships and the strong following that the healthcare sector enjoys among the Continent’s lenders.

The group makes wound therapeutics and ostomy care products with more than half of its revenues coming from Europe. Debt will primarily be denominated in euros with a small dollar component.


Target nation: UK

Date announced: 21/12/07

Deal type: LBO

Acquirer: Apax

Total value: £1bn

Mandated arrangers: HSBC and more

Financing: £850m

HSBC, GE, Lloyds TSB and RBS launched an anchor syndication phase for the debt facility of close to £850m backing Apax and GMG’s buyout of Emap in early April, which has yet to close. Banks said the bulk of mezzanine and some of the senior debt had been placed.


Target nation: Germany

Date announced: 07/04/08

Deal type: Secondary

Acquirer: Industri Kapital

Total value: Undisclosed

Arranger: UniCredit

Financing: £205m

Industri Kapital has mandated UniCredit (HVB) as sole bookrunner and mandate lead arranger on a €205m debt package backing the buyout of Flabeg from EquiVest/CBR.

Landesbank Rheinland-Pfalz (LRP) and HSH joined as joint lead arrangers ahead of syndication. Facilities are split between €175m of senior and €30m of mezzanine. Leverage is 3.1x through senior and 3.9x total debt. The bank meeting was held on May 15 in Furth im Wald, Germany. Germany-based Flabeg manufactures automotive mirror glass and mirrors for the renewable energy industry.


Target nation: UK

Date announced: 12/02/08

Deal type: Secondary

Acquirer: Merrill Lynch

Total value: Undisclosed

Arrangers: BoI and others

Financing: Unknown

Mandated lead arrangers Bank of Ireland, Barclays, Merrill Lynch and RBS have closed syndication of the £222.5m debt backing the acquisition of IDH by Merrill Lynch Global Private Equity. Syndication of senior debt attracted 10 banks, in addition to the arranger group. Debt is split between a £5m seven-year revolver, a £55m seven-year acquisition facility, a £40m seven-year amortising term loan A, a £41.25m eight-year term loan B, a £41.25m nine-year term loan C and a £40m 10-year mezzanine tranche.


Target nation: Norway

Date announced: 28/05/07

Deal type: Acquisition

Acquirer: Ineos

Total value: €583m

Arranger: Barclays and others

Financing: €620m

The €620m debt package backing the 2007 acquisition by leveraged British chemicals corporate Ineos of Norsk Hydro’s petrochemicals business Kerling has been launched by Barclays and Merrill Lynch. Ineos bought the business for NKr5.5bn in debt and equity.

Debt is split between €345m in senior facilities, including a €305m 18-month term loan and a €40m 18-month revolver, and a further €275m of two-year mezzanine paying 10%, split between 5% cash and 5% PIK.


Target nation: UK

Date announced: 21/12/07

Deal type: LBO

Acquirer: KKR

Total value: Unknown

Arrangers: Barclays, HSBC

Financing: £668.41m

Barclays and HSBC have launched general syndication of the senior debt backing KKR’s buyout of Northgate Information Solutions. Goldman Sachs and Park Square underwrote a mezzanine tranche.

Seven banks joined syndication in a senior phase targeted at relationship banks. Arrangers have now launched general syndication. Senior debt is made up of £385m and €360m. Facilities comprise a £145m term loan A paying a margin of 275bp over Libor, a term loan B is split into £42.5m and €180m currency tranches both for eight years paying a 350bp margin, a term loan C is split between £42.5m and €180m of nine-year facilities paying 400bp.

Undrawn facilities are made up of a £5m seven-year revolver paying 275bp and a £60m capex facility paying 275bp. Banks are invited to join on tickets of £5m paying a 140bp fee, and £15m paying 110bp. Leverage is 4.3x through senior and 5.9x in total.

Potel & Chabot

Target nation: France

Date announced: 26/09/07

Deal type: LBO

Acquirer: 21 Centrale Partners

Total value: Undisclosed

Arranger: Credit Mutuel

Financing: €79.2m

Credit Mutuel-CIC has completed syndication of the €79.2m senior debt facility supporting 21 Centrale Partners’ acquisition of Potel & Chabot. In syndication Banque Palatine, Banque Populaire, BNP Paribas, BRED, Cadif, Credit Cooperatif, Fortis and Monte Paschi Banque all joined.

Potel & Chabot is France’s largest provider of high end catering services for the corporate and institutional market.


Target nation: UK

Date announced: 30/04/08

Deal type: Tertiary

Acquirer: Warburg Pincus

Total value: £565m

Arranger: RBS

Financing: £300m

Safety-Kleen Europe bookrunner RBS has been joined at the top level by ING and Lloyds TSB on Warburg Pincus’ tertiary buyout from JPMorgan Partners and CCMP Capital Advisors. The deal is understood to be backed by £300m of debt.

Safety-Kleen provides machine services, parts cleaning and waste collection services to the autoparts industry. The sponsor won the deal in a competitive auction that featured four other private equity bidders: Blackstone, Cinven, Hellman & Friedman and Montagu.


Date announced: Germany

Deal type: 14/02/08

Acquirer: Paine

Total value: €500m

Arranger: JPMorgan

Financing: €415m

Bookrunner and coordinator JPMorgan, and bookrunners BNP Paribas, Commerzbank and Unicredit have closed and are set to allocate the €415m debt package backing Paine & Partners’ buyout of German gas spring manufacturer Stabilus.


Target nation: Netherlands

Date announced: 19/06/07

Deal type: LBO

Acquirers: Candover

Total value: €1.5bn

Mandated arranger (s): Barclays and Goldman Sachs

Financing: €863m

The syndication by bookrunners Barclays and Goldman Sachs of €863m senior facilities backing the buyout of Dutch industrial consortium Stork by Candover is understood to be progressing well, though the going is slow and the deal has yet to close.

Other large deals in either senior or general syndications are also making slow progress.

Source: IFR Loans/EVCJ