Netherlands
Date announced: 17/07/08
Acquirer: Lion Capital
Total value: Undisclosed
Arranger: Rabobank
Financing: €190m
Bank of Ireland, Barclays and ING are close to wrapping up syndication of the €190m debt package backing Lion Capital’s buyout of Benelux region frozen snacks business Advang Holding.
Debt is split into a €55m seven-year term loan A paying 275bp over Euribor, a €45m eight-year term loan B paying 325bp, a €45m nine-year term loan C paying 375bp, a €10m seven-year revolver paying 275bp and a €35m 10-year mezzanine tranche paying 550bp cash and 550bp PIK.
Leverage is 4.3x through senior and 5.4x through total debt.
Target nation: UK
Date announced: 29/08/08
Acquirer: CD&R
Total value: £417m
Arranger: Barclays
Financing: £255m
Barclays Capital and RBS have now been joined by BNP Paribas and RBC as bookrunners and mandated lead arranger on the £255m of debt facilities backing the buyout of Bodycote Testing Group by Clayton, Dubilier & Rice.
Debt is split between a £46m seven-year amortising TLA paying 300bp over Libor, a £50m eight-year bullet TLB paying 350bp, a £50m nine-year bullet TLC paying 400bp, a £35m seven-year RCF paying 300bp, and a £20m seven-year capex/acquisition facility paying 300bp. A £54m 10-year mezzanine facility pays 450bp cash and 600bp PIK and is NC2/102/101.
Opening net senior leverage is 3.7x and net total leverage is 5.1x. The facilities will be denominated in sterling, US and Canadian dollars and euros. There will be a carve-out of the B and C loans for institutional investors. Syndication is expected to launch in late September.
Target nation: UK
Date announced: 28/08/08
Acquirer: Clayton, Dubilier & Rice
Total value: £417m
Arranger: Barclays
Financing: £250m
Mandated lead arrangers Barclays and RBS have backed Clayton Dubilier & Rice’s £417m buyout of UK engineering group Bodycote’s testing business BTG with a £250m underwriting.
The deal features an unusually large equity check of 55%. The sale has been made on a cash and debt-free basis. Banks have underwritten the remaining 45% of the acquisition. The price is 20 times the £21m operating profits that the business made last year and leverage is 5x.
Target nation: France
Date announced: 19/08/08
Acquirer: Arcapita
Total value: €500m
Arranger: Calyon
Financing: €200m
Calyon, ING, RBS and Societe Generale have wrapped up the €200m senior debt package backing Arcapita’s acquisition of French warehousing and logistics business CEPL. The deal closed without a general syndication phase after a small number of banks signed in with the funding for the acquisition. The original mandated lead arranger group had arranged staple financing before the deal.
Arcapita of Bahrain already owns a number of businesses in the sector, including Pinnacle, which operates warehouses in Central and Eastern Europe.
Target nation: France
Date announced: 19/06/08
Acquirer: LBO France
Total value: €1.6bn
Arranger: HSBC
Financing: €900m
General syndication of €900m of facilities backing the buyout of French engineering group Converteam by LBO France has launched, through HSBC, Lehman Brothers, Natixis, RBS and SG. General syndication follows a senior joint lead arranger phase.
Despite the collapse of Lehman, the other banks associated with the deal said that given the strength of the book they expected the process to continue.
Debt is split between a €290m seven-year term loan A paying 275bp over Euribor, a €145m eight-year term loan B paying 325bp over, a €145m nine-year term loan C paying 375bp over, a €220m 10-year mezzanine tranche paying 600bp cash and 450bp PIK and a €100m seven-year revolver paying 275bp.
Tickets are for €20m paying 115bp and €30m paying 135bp. Converteam was previously owned by Barclays Private Equity, which retains a stake in the business.
Target nation: UK
Date announced: 09/07/08
Acquirer: Advent International
Total value: £300m
Arranger: Barclays
Financing: £222m
Barclays, Calyon and RBC have launched syndication of £222m of debt facilities backing Advent’s acquisition of care home operator Craegmoor.
Debt is split into a £37.75m seven-year term loan A paying 275bp over Libor, a £47.75m eight-year term loan B paying 350bp, a £47.75m nine-year term loan C paying 400bp, a £15m seven-year revolver paying 275bp and a £30m seven-year capex facility paying 275bp. A £44.25m 10-year mezzanine piece has been preplaced.
Target nation: UK
Date announced: 07/09/08
Acquirer: Advent International
Total value: £523.9m
Arranger: Dresdner Kleinwort
Financing: £334m
Mandated lead arranger Dresdner Kleinwort’s general syndication of £334m of senior facilities for Domestic & General (D&G) has launched. Subordinated tranches have been pre-placed. Advent International completed the acquisition of UK domestic appliance insurer D&G through a successful offer for its shares listed on the London Stock Exchange in December 2007.
Target nation: UK
Date announced: 23/07/08
Acquirer: Lion Capital
Total value: £1.1bn
Arranger: JPMorgan
Financing: £730m
Foodvest has launched syndication of facilities backing Lion Capital’s buyout of its business, through global co-ordinator JPMorgan and Lloyds TSB, Rabobank, RBS and SG, each joint physical bookrunners across senior and debt, and Nordea as joint physical bookrunner on the senior debt.
Facilities are denominated in sterling and euros and split into a £60m six-year revolver paying 300bp over Libor, a £150m six-year term loan A paying 300bp, a £100m seven-year term loan B paying 350bp, a £240m eight-year term loan C paying 425 and a £180m nine-year mezzanine tranche paying 1,050bp – split between 500bp cash pay and 550bp PIK.
An institutional carve-out accounts for half of the term loan B and half of the term loan C. The carve-out and mezzanine tranche are both denominated only in euros.
A £25m ticket pays 150bp, a £15m ticket 125bp and a £10m ticket 100bp. Tickets are of the pro rata debt across the senior part of the structure.
Target nation: UK
Date announced: 19/06/08
Acquirers: Blackstone, Carlyle and Providence
Total value: £1.9bn
Arranger: Unknown
Financing: £1.8bn
A private equity consortium of Blackstone, Carlyle Group and Providence Equity Partners has withdrawn its bid for UK media company Informa PLC, which earlier this month rejected its takeover offer.
A source close to the financing said a debt deal remained on the table right up to the point the bid was withdrawn, and that approach floundered on the equity side.
A group of 11 banks had agreed to support a £1.8bn debt facility split between £1.4bn senior and £400m of mezzanine. The group was made up of Bank of America, Bank of Ireland, Barclays, BNP Paribas, Calyon, GE, HSBC, ING, JPM, Lloyds TSB and RBS.
The consortium first bid for Informa at 506 pence per share, but subsequently reduced the offer to 450 pence a share, before finally walking away altogether.
Target nation: UK
Date announced: 08/07/08
Acquirer: Baring Private Equity Asia
Total value: £190m
Arranger: Credit Suisse
Financing: £125m
Mandated lead arranger Credit Suisse has launched a US$231.3m leveraged buyout of London-listed educational services provider Nord Anglia by Baring Private Equity Partners in what will be the first LBO from the education sector from Asia.
Although Nord Anglia is headquartered in the UK, the financing has Asian links in that Nord Anglia operates primarily in Asia and the financial sponsor buying it is the Asian arm of Baring Private Equity Partners.
Credit Suisse is attempting to sell down to debt to lenders in the region and already has with four commitments through AMP Capital Investors, Barclays, Mizuho Corporate Bank and UOB Asia.
AMP and Barclays are said to have come into the US$47.7m seven-year junior tranche, while Mizuho and UOB have joined as equal status arrangers on the US$133.6m senior secured tranche.
The US$133.6m senior secured tranches is split equally into a six-year amortising term loan A and a 6-1/2-year bullet term loan B. There are also two additional undrawn tranches: a US$40m 6-1/2-year capex tranche and a US$10m 6-1/2-year revolver.
Those familiar with the financing said the mezzanine debt had already been fully subscribed with no further need to bring in more investors. Rival bankers, however, found it hard to believe that the mezz tranche was covered particularly as it pays unattractive returns of around Libor plus 10% comprising a cash coupon of 450bp over Libor in cash and 550bp over Libor through a PIK note.
With institutional investors unlikely to be attracted to any financing paying returns lower than the high teens, some believe Nord Anglia’s mezz tranche features an equity kicker for investors that must be boosting the returns.
The term loan A, the capex tranche and the revolver pay margins of 300bp over Libor, while the term loan B pays 325bp.
Nord Anglia provides educational services through two divisions: the international schools division that operates nine schools under the British International Schools brand, and the learning services division that provides contractual education services to public schools in the UK and the Middle East. Of the nine British International Schools, four are in China, one is in South Korea and four more in Eastern Europe. Together the nine schools have a capacity for 7,300 students, 5,000 of whom will be in Asia.
The fact that the underlying business does not have any hard assets and lenders will largely rely on cashflows to service the debt is a hurdle potential lenders will have to overcome. Nord Anglia derives half of its revenues from Asia and the Middle East. One of the concerns lenders will raise is the ability to upstream dividends from the operations in China.
The asset-light nature of the business will also not find favour with a section of lenders in the region that have grown up on a diet of asset-based lending.
The financing does have its share of positives. The business generates stable, diversified cashflows that are highly predictable.
The LBO features leverage (total debt-to-EBITDA) on the drawn facilities at around 4.7 times based on the pro forma EBITDA of US$38m for the year ending August 31 2008.
The senior debt represents a leverage of 3.5 times, while that on the junior tranche is at 1.2 times.
Baring Private Equity Asia’s equity contribution of about 31% of the £190m (US$336m) acquisition price is close to the size of the senior debt tranches. The takeover represents an EBITDA multiple of 8.84 times and is Baring’s second attempt at buying out the company after being rebuffed by the management in June when it made an offer of about £180m.
Target nation: France
Date announced: 25/07/08
Acquirer: Astorg
Total value: €200m-€300m
Arranger: ING
Financing: €190m
Physical bookrunner and mandated lead arranger ING has been joined by bookrunners and mandated lead arrangers IKB, Barclays and GE and joint lead arrangers LCL and SG after a senior phase syndication of debt backing Astorg’s buyout of medical imaging and nightvision products maker Photonis. The deal is backed by €152.5m of senior debt and €37.5m of mezzanine. joint lead arrangers joined on a €20m ticket.
Senior facilities are split between a €47.5m seven-year term loan A paying 275bp over Euribor, a €32.5m eight-year term loan B paying 325bp and a €32.5m eight-year term loan B paying 375bp.
In addition there are a further €40m of undrawn facilities. The €37.5m 10-year mezzanine tranche pays 10.5%, comes with warrants and is non-call two. It was pre-placed with Axa Private Equity Mezzanine.
The deal features a 45% equity contribution and total leverage is 3.3x EBITDA through senior facilities and 4.3x through total debt.
Target nation: Germany
Date announced: 04/12/07
Acquirer: Triton
Total value: Undisclosed
Arranger: Mediobanca
Financing: €295m
Mediobanca as mandated lead arranger and bookrunner has closed the €295m all senior debt package supporting Triton’s buyout of Reutgers Chemicals from Evonik Industries.
Ahead of general syndication Landesbank Baden-Wuerttemberg joined as a mandated lead arranger while Sal Oppenheim Jr and KBC joined as joint lead arrangers. After general syndication a total of 11 banks make up the syndicate.
Founded in 1849 Rutgers is Europe’s largest supplier of basic aromatic products.
Dresdner Kleinwort is now out to general with the £334m all senior debt package supporting Advent’s buyout of Domestic and General.
Target nation: Netherlands
Date announced: 17/07/08
Acquirer: Doughty Hanson
Total value: €750m
Arrangers: ING and UBS
Financing: €445m
Mandated lead arrangers and bookrunners ING and UBS have launched syndication of the €445m debt package supporting Doughty Hanson’s secondary buyout of TMF Group. Prior to launch, the Bank of Ireland joined as a mandated lead arranger.
Senior debt is split between a €80m seven-year term loan A paying 275bp over Euribor, a €92.5m eight-year term loan B at 325bp, a €92.5m nine-year term loan C at 375bp, a €30m revolver and a €50m acquisition loan. In addition there is a €100m mezzanine loan.
Lenders are now being invited into the senior debt on tickets of €20m for 140bp or €10m for 115bp. The junior portion has already been successfully syndicated.
Leverage is set at 4.3x senior debt, rising to 5.9x total. These multiples are expected to fall by a full turn over the next year, given the highly cash-generative and low-capex nature of the business. The equity contribution is a chunky 55%, meaning the senior debt totals 32% of the capital structure.
As a secondary buyout, TMF already has a banking group in-situ and it is hoped that this, combined with the conservative structure and strong credit, will ensure the deal navigates an increasingly tricky leverage market.
Target nation: Germany
Date announced: 15/07/08
Acquirers: PAI and GS Capital Partners
Total value: Undisclosed
Arranger: Calyon
Financing: €970m
A bank meeting was held for the €970m all-senior facilities backing the buyout of Xella, after what bookrunners said was a successful early-bird phase. Debt backing the acquisition of Xella by PAI partners and Goldman Sachs Capital Partners from Haniel Group closed and funded on August 29.
Global co-ordinators are BNP Paribas, RBS and UniCredit (HVB). They and mandated lead arrangers Calyon and LBBW have been joined ahead of closing by Erste Bank, KfW, Mediobanca, Commerzbank, HSH Nordbank, WGZ and GE. Tickets of €25m for 110bp and €15m for €95m are offered.
Facilities are split between a €270m seven-year TLA paying 300bp over Euribor, a €275m eight-year TLB paying 375bp, a €275m nine-year TLC paying 425bp, a €75m seven-year revolving credit facility paying 300bp and a €75m seven-year acquisition/capex line paying 300bp.
Net senior and total leverage at closing was 2.9x based on 2007 adjusted EBITDA of €271m, and has since fallen to 2.7x based on July 2008 adjusted LTM EBITDA. Equity and quasi-equity is approximately 50%.
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