LBO Syndications arranged in February


Target nation: Norway

Date announced: 07/02/08

Deal type: LBO

Acquirers: 3i

Total value: US$395m

Mandated arranger: GE

Financing: Unknown

3i has mandated GE (Global Coordinator), Calyon, Danske Bank, European Capital Financial Services and HSH Nordbank to underwrite debt backing the US$395m buyout of Active Pharmaceutical Ingredients (API) a Norway based unit of Alpharma. Much of the debt will be held by the underwriters with a soft syndication of the remaining facilities targeted at banks which backed unsuccessful bidders in the auction for the business, and are already comfortable with the credit. 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.

Aston Martin

Target nation: UK

Date announced: 07/02/08

Deal type: LBO

Acquirer: Consortium (see below)

Total value: £522m

Mandated arranger: WestLB

Financing: £225m

Bookrunner WestLB has completed syndication of a £225m Shariah compliant senior secured acquisition facility backing the leveraged buyout of luxury car maker Aston Martin. The deal is the first ever European LBO backed entirely by Islamic financing.

Debt is structured as a Shariah compliant commodity Murabaha. The all senior bullet deal includes a £200m eight year term loan and £25m eight year revolver. The deal supports a consortium of incoming Chairman David Richards, and Kuwait’s The Investment Dar (TID) and Adeem Investment & Wealth Management which agreed a £522m deal to buy Aston Martin from Ford in 2007.

Walid Sarieddine, head of Islamic Finance at WestLB who led the deal said: “The requirement to have a Sharia-compliant financing solution came from the sponsors, The Investment Dar and Adeem Investments, both Sharia-compliant investors.” That requirement is not typical for Middle East funds but is becoming more common. With Middle East investors increasingly active as financial sponsors on European deals it is likely we will see more of this type of deal.

The deal pays 295bp over six month libor for the initial five years, stepping up to 345bp over for the remaining three years. The terms of the deal include a put option at the end of year five allowing the participating banks to demand repayment of the facilities. Sponsors will be permitted to repay the facilities at the end of every rollover period.

The deal was syndicated to a mix of European banks, GCC banks and Asian banks.

Lloyds TSB, Bahrain Islamic Bank, Standard Bank and European Islamic Investment Bank joined as mandated lead arrangers ahead of the launch of syndication. Qatar National Bank, Europe Arab Bank joined as mandated lead arrangers and Kuwait Finance House (Malaysia) Berhad, Bank Mualamat Malaysia Berhad and Banque BIA joined as managers during syndication.


Target nation: UK

Date announced: 08/02/08

Deal type: LBO

Acquirer: Montagu

Total value: £1.7bn

Mandated arrangers: Barclays and others

Financing: Unknown

Montagu Private Equity and Global Infrastructure Partners (GIP) have mandated Barclays, Credit Suisse, HBOS, HSBC and RBS to underwrite a recommended £1.7bn public top private bid for waste services group Biffa.

WasteAcquisitionco will pay 350 pence in cash per share for Biffa, valuing the equity at £1.231bn, implying an enterprise value of £1.7bn to £1.9bn. The underwriters will provide debt facilities of more than £1bn to back the deal. Montagu and GIP will contribute £306m in equity each for their respective 43% stakes in the business, junior partner UCIL, a HBOS affiliate, will pay £100m for the remaining 14%.


Target nation: Sweden

Date announced: 01/11/07

Deal type: Secondary

Acquirer: Cinven

Total value: €540m

Mandated arrangers: Danske Bank and others

Financing: SKR3bn

Danske Bank, DnB Nor and RBS have closed syndication of the SKR3bn of debt backing Cinven‘s buyout of Coor Service Management from 3i. Senior and mezzanine tranches both closed oversubscribed.

Coor is a Nordic provider of facility management services. It employs 3,700 people in Sweden, Denmark, Norway, Finland and Belgium. It was previously part of Skanska.

Cinven paid €540m for Coors in November last year. The company specialises in managing, developing and streamlining service functions for offices, properties and factories. These services are provided under long term contracts to a wide range of blue chip companies and public institutions across the Nordic region.

Drie Mollen

Target nation: Netherlands

Date announced: 16/01/08

Deal type: Secondary

Acquirers: CapVest

Total value: Undisclosed

Mandated arranger: Rabobank

Financing: €275m

The syndication of the €275m loan backing CapVest‘s buyout of Drie Mollen has launched. Rabobank is mandated lead arranger and bookrunner. Allied Irish Banks, the Bank of Ireland and ING joined the transaction.

Banks are offered a 95bp fee for a €25m ticket and an 85bp fee for a €20m ticket. The facility is split between a 7-year €60m term loan A paying 225bp, an 8-year €57.5m term loan B at 275bp, a 9-year €57.5m term loan C at 325bp, a 7-year €20m revolver with a margin of 225bp, a 7-year €30m capex facility also paying 225bp.


Target nation: UK

Date announced: 21/12/07

Deal type: LBO

Acquirer: Apax

Total value: £1bn

Mandated arrangers: HSBC and more

Financing: £850m

Apax Partners and the Guardian Media Group (GMG) will not merge newly acquired Emap with Apax-owned Incisive Media and its American Lawyer bolt-on until the debt market improves.

In December Apax GMG mandated HSBC, GE, Lloyds TSB and RBS to arrange an £850m debt facility to support the buyout of Emap. That debt will now be syndicated as a stand alone financing, due to be launched at the end of March.

A source close to the situation said: “The industrial logic to merge the businesses remains but the debt market is currently unable to support that move at levels attractive enough to justify refinancing existing facilities.”

Earlier facilities backing the 2007 acquisitions of Incisive and American Lawyer will remain in place. In spring 2007 RBS arranged a £222.3m loan, syndicated ahead of the credit crunch. That debt is made up of a £72.4m eight-year term loan B paying 237.5bp over Libor, a £72.4m nine-year term loan C paying 287.5bp, an £8.5m seven-year revolver paying 200bp, a £25m seven-year amortising acquisition facility paying 225bp and a £44m 10-year mezzanine line paying 862.5bp. RBS also underwrote debt backing Incisive’s subsequent US$630m buyout of US publisher American Lawyer, debt yet to be syndicated but also underwritten pre-crunch.

Apax acquired UK publishing group EMAP in December last year, through a consortium called Eden Bidco co-owned by GMG, the UK multimedia company that owns, among others, the national newspaper the Guardian and regional newspapers such as the Manchester Evening News.

Eden Bidco offered 931 pence in cash for each share, valuing the entire issued and to be issued ordinary share capital of Emap at the expected time of completion at approximately £2bn.

Irina Hemmers, partner at Apax, said: “We believe that Emap is a high quality asset which is uniquely positioned in attractive markets.”


Target nation: France

Date announced: 08/02/08

Deal type: LBO

Acquirer: Industri Kapital

Total value: Undisclosed

Mandated arrangers: SG and CM-CIC

Financing: €172m

Industri Kapital has mandated bookrunners SG and CM-CIC to arrange €172m of debt backing its buyout of Groupe Etanco. Bank of Ireland joined as a mandated lead arranger ahead of syndication.

Etanco was founded in 1952 and is the leader in the design, manufacturing and distribution of building fastener and fixing systems. The family employs 600 people in six sites and generates a turnover of €130m. The group has a full range of 80,000 products grouped under four categories: Fastening, Over-Roofing, Safety and Façades which allow it to offer products adapted to the specific market requirements particularly in terms of environmental and European regulatory constraints.


Target nation: UK

Date announced: 12/02/08

Deal type: Secondary

Acquirer: Merrill Lynch

Total value: Undisclosed

Mandated arrangers: BoI and others

Financing: Unknown

Merrill Lynch Global Private Equity (MLGPE) has mandated Bank of Ireland, Barclays, Merrill Lynch and RBS to arrange debt backing its acquisition of UK based Integrated Dental Holdings (IDH), the UK’s largest chain of dental practices in a deal worth between £250m and £300m, according to a source close to the situation. Debt will include senior and mezzanine facilities.

The deal is MLGPE’s first sole buyout in Europe, the business is a secondary buyout from mid-market investor LGV Capital which grew IDH with a buy and build strategy. IDH operates more than 200 practices serving more than 1.5 million patients served by around 700 dentists.


Target nation: Turkey

Date announced: 18/02/07

Deal type: LBO

Acquirer: BC Partners

Total value: US$1.64bn

Mandated arrangers: Unknown

Financing: See below

A consortium of BC Partners and minority investors Turkven Private Equity and DeA Capital have agreed a US$1.64bn deal to buy Koc Holding’s 50.8% stake in Migros Turk, Turkey”s largest supermarket chain. The deal is funded with 50% equity and 50% with debt provided by Turkish banks Garanti Bank, Is Bank and Vakifbank..

Sponsors are increasingly turning to domestic lenders as investment banks and global commercial banks struggle to support deals. Turkish banks in particular have liquidity and have a reputation for supporting domestic borrowers. Sponsors can negotiate with such banks with a higher degree of confidence that a deal can be delivered, in contrast to the situation with international bankers hamstrung by nervous credit committees. Domestic lenders are also more likely to offer attractive pricing in the current market. As mainly take and hold lenders they are under less pressure to price with syndication in mind.

Indeed, the deal brings together key private equity trends for the year ahead: sponsors seeking value in a growth opportunity in a high growth economy and relying on local market liquidity to provide debt for lower leveraged deals.

The deal values the entire business at US$3.25bn and will be followed by a tender offer which will then be made later for the rest of the shares in the Istanbul-listed retailer. Migros has a 22% market share. Bulend Ozaydinli former CEO of Koc Holding, Turkey’s largest conglomerate, will become chairman of the group.

The deal is a record-breaking deal for the Turkish market, which has only seen leveraged buyout activity since acquisition finance became available in 2004.

The deal followed an auction by Koc Holding which is exiting its non-strategic businesses. The auction attracted bids from trade buyers Carrefour and local partner Sabanci, Aldi and from private equity firms KKR partnered with Croatian foods group Agrokor and from Bain.


Target nation: Germany

Date announced: 12/10/07

Deal type: Secondary

Acquirer: EQT

Total value: Undisclosed

Mandated arrangers: Commerzbank, BNP Paribas and RBS

Financing: €700m

Commerzbank, BNP Paribas and RBS have launched general syndication of the €700m of debt backing EQT‘s buyout of SAG, a German power plant builder and operator.

Senior debt is split between a €50m term loan A paying 225bp over Euribor, a €97.5m term loan B paying 275bp, a €97.5m term loan C paying 325bp and a €325m revolving credit facility, which includes a circa €200m bond line paying 225bp, a €95m mezzanine loan pre placed and underwritten by ICG. In addition facilities include a €50m cash bridge. Leverage is 3.5x through senior and 5x total.