LBO Syndications arranged July and August

Advang Holding


Date announced: 17/07/08

Acquirer: Lion Capital

Total value: Undisclosed

Arranger: Rabobank

Financing: €190m

Lion Capital has mandated Bank of Ireland, Barclays and ING to arrange a €190m debt package backing its buyout of Benelux frozen snacks business Advang Holding, owner of Ad van Geloven and Mora, from Egeria Capital, a Dutch mid-market investor. Debt is split between €155m of senior and €35m of mezzanine tranches.

Egeria Capital bought Mora in 2006 from Unilever to bulk up its Ad van Geloven frozen meals business, which it also acquired from Unilever, in 2002. Founded in 1960 in Tilburg, Holland, Ad van Geloven employs more than 900 people in five factories in the Netherlands and Belgium. In 2007, the company generated net sales of more than €170m.

Alliance Boots

Target nation: UK

Date announced: 25/04/07

Acquirer: KKR

Total value: £10bn

Arranger: Deutsche Bank

Financing: £9.02bn

Some of those left holding the debt backing the buyout of Alliance Boots hope to sell a further, and final, £650m of first-lien term loan B debt at 92% of its face value.

In May, the deal’s bookrunners sold up to 50% of the original £5bn term loan B debt at 91%, along with a substantial portion of the £1bn second-lien tranche at 85%.

The latest offering is being led by Deutsche Bank and JPMorgan, and is in line with a strategy seen since the beginning of the credit crunch of drip-feeding overhang debt into the market in an effort not to overwhelm demand.

Barclays and UniCredit are to hold their portions of the loan rather than sell at a discount and realise the implied loss, a decision in line with the position they took in May. The other original underwriters were Citi, Bank of America, Merrill Lynch and RBS, a number of which cleared their exposure to the deal in the earlier sell-down.


Target nation: Poland

Date announced: 11/08/08

Acquirer: IK Investment Partners

Total value: Undisclosed

Arranger: UniCredit

Financing: €97.5m

UniCredit has been mandated as sole bookrunner on a €97.5m debt package backing IK Investment Partners’ secondary buyout of Axtone from Advent International. Debt is split between senior and mezzanine.

Axtone manufactures rail car shock-absorption equipment. It is forecast to generate turnover in excess of €70m this year.

Casa Reha

Target nation: Germany

Date announced: 21/12/07

Acquirer: HgCapital

Total value: €330m

Arranger: RBS

Financing: €155m

Sole bookrunner RBS has closed syndication of debt backing German nursing homes operator Casa Reha by HgCapital. Debt is split between a €30m seven-year term loan A paying 225bp, an eight-year term €45m loan B paying 300bp, a nine-year term €45m loan C paying 350bp and €35m of mezzanine, which was preplaced.

Debt is 3.3x through senior and the deal comes with a 56% equity slug. Tickets of €20m pay a 110bp fee, with €15m paying a 95bp fee.

Cash Systems

Target nation: UK

Date announced: 17/06/08

Acquirer: Carlyle

Total value: £360m

Arranger: Calyon

Financing: £270m

The Carlyle Group has launched syndication of the £272m facilities funds backing its buyout of De la Rue’s Cash Systems unit. Bookrunners are Calyon, Lloyds TSB, Societe Generale and GE. The deal includes £207m of senior debt and £65m of mezzanine. Debt is split into a £62m seven-year term loan A paying 275bp, a £62m eight-year term loan B paying 350bp, and a £62m nine-year term loan C paying 400bp. It also includes a £26m seven-year RCF paying 275bp and a £60m 10-year mezzanine tranche paying 10%, split between 4.5% cash and 5.5% PIK. Leverage through senior debt is 3.4x and 4.5x through total leverage.

The Cash Systems business provides cash handling technology, including teller and desk-top systems and dispensing machines.


Target nation: Italy

Date announced: 15/07/08

Acquirer: Investcorp

Total value: Undisclosed

Arranger: ING

Financing: €119.5m

The €119.5m in senior financing backing the acquisition of Ceme by Investcorp, has been mandated to ING as sole mandated lead arranger and bookrunner.

The financing comprises senior facilities of €71.5m, €20m in capex and acquisition facilities, and a revolver of €10m. The remaining €18m is a mezzanine facility jointly arranged by ING and Mezzanove Capital.

Ceme is an Italian producer of pumps, valves and other electrical and mechanical components.


Target nation: US

Date announced: 02/05/08

Acquirers: Nordic Capital

Total value: US$4.1bn

Arranger: JPMorgan

Financing: US$2.1bn

Syndication of the US$2.975bn debt package backing Nordic Capital’s and Avista Capital Partners’ US$4.1bn buyout of ConvaTec from Bristol-Myers Squibb will be allocated early this week, with significant scale-backs after it closed twice oversubscribed.

Bookrunners and mandated lead arrangers are JPMorgan (global co-ordinator), Bank of Ireland, Dresdner Kleinwort, UniCredit and GE, alongside mandated lead arrangers HSH Nordbank, Mizuho Corporate Bank, Nordea, SEB Merchant Banking and Swedbank.

Convatec is a US-based healthcare business, developing and manufacturing wound therapeutics and ostomy care products, with more than half its revenues coming from Europe.

While the deal is by far the largest leverage package underwritten in Europe this year, it relied on general syndication of a relatively small proportion of the total package. This is explained by the number of essentially buy and hold mandated lead arrangers either involved in the deal from the start, or brought in at a senior level.

Bankers recognised that this was essential if they were to successfully build momentum in a deal that had no track record as a leveraged entity. Tapping the still strong traditional support of Nordic lenders for regional deals and sponsors was also a key part of the syndication strategy.

Senior debt is split into a US$750m seven-year term loan paying 300bp over Libor, a US$425m eight-year term loan B at 350bp, a US$675m term loan C at 425bp, a US$125m revolver at 300bp and a US$100m capex piece also paying 300bp. In addition, there is a US$900m mezzanine piece.

Leverage is 4x senior debt rising to 5.99x total debt. Lenders are now invited to join on tickets of US$30m earning 140bp or US$15m for 100bp.


Target nation: France

Date announced: 19/06/08

Acquirer: LBO France

Total value: €1.6bn

Arranger: HSBC

Financing: c€1bn

HSBC, Lehman Brothers, Natixis, RBS and SG have been mandated to provide a debt package to support a €1.6bn takeover bid for Converteam by LBO France, which is in exclusive talks to buy a stake in the business.

Debt is likely to be in the region of €1bn. Converteam is a French engineering group currently owned by Barclays Private Equity, which will retain a stake in the business.


Target nation: UK

Date announced: 21/12/07

Acquirer: Apax

Total value: £1bn

Mandated arrangers: HSBC

Financing: £850m

Bookrunners HSBC, GE, Lloyds TSB and RBS are out with a re-cut and relaunched £850m debt package backing Apax and GMG’s buyout of the publishing group Emap, after the original debt package failed in syndication.

The new structure adds a term loan E or second-lien tranche, which will be held by the bookrunners and splits an existing mezzanine tranche into senior and junior tranches – a move aimed at cutting leverage on a cash-pay basis. Bookrunners said that as well as the impact of the structural flex on leverage, there has been growth in the business itself that alone produced a 1/4 turn decrease in the debt to EBITDA ratio.

An anchor syndication phase was launched in April, followed by a wider syndication, which failed to win sufficient support because of fears in the market, particularly about the debt multiple and the ability of the underlying business to respond to a potentially more difficult trading environment for B2B publishing – though it was subsequently announced that first-quarter profits were actually 15% up on the equivalent period last year.

The new version of the deal includes drawn senior facilities of a £125m term loan A paying 300bp, a £156m term loan B paying 350bp and a £156m term loan C paying 400bp. Undrawn senior debt is made up of a £35m revolver and £100m of acquisition facilities. A £53m term loan E/second-lien tranche has been carved out of the senior facilities and will not be syndicated.

Mezzanine is now split between a £157.5m senior tranche 4% cash-pay and 5.75% PIK and a £52.5m junior PIK tranche paying 11.75%, both featuring the same call protection of non-call one, then at 102, 101.

Top-tier banks are offered a 140bp fee, with 110bp offered to arrangers. The deal is aimed primarily at the bank market but features a £100m fund carve-out.

Excluding the unsyndicated second-lien, leverage across drawn senior facilities is now 3.9x EBITDA, with total cash-pay debt, which excludes both the second-lien and PIK facilities, now 5.9x.

The original structure featured £490m of senior debt split among A, B and C tranches, paying the same 300bp, 350bp and 400bp over Libor coupons, £135m of undrawn acquisitions and revolving credit facilities and a £210m mezzanine tranche paying 9.75% with call protection of 103, 102 and 101


Target nation: Hungary

Date announced: 13/06/08

Acquirer: Ares and Merrill Lynch GPE

Total value: €800m

Arranger: ING

Financing: €550m

Ares Life Sciences and Merrill Lynch Global Private Equity have mandated ING, UniCredit and Bank of Ireland to arrange the debt backing its secondary buyout of Euromedic, a provider of dialysis and diagnostic services, from Warburg Pincus.

Debt totals €550m made up of both senior and mezzanine facilities. Leverage is around 4x senior and 6x total. The auction attracted a wide range of bidders, though sources said ING and UniCredit were already close to the deal and were always likely to be on the winning mandate.


Target nation: UK

Date announced: 17/04/08

Acquirer: Umbrellastream

Total value: £1.73bn

Arrangers: RBS

Financing: Unknown

Umbrellastream has launched syndication of the US$2.4bn debt backing the buyout of Expro. Umbrellastream is the acquisition vehicle of a consortium of Candover, Goldman Sachs Capital Partners and AlpInvest Partners. Expro is a global oilfield services business.

Mandated lead arranger and co-ordinator is RBS, with mandated lead arrangers HSBC, Lloyds TSB, RBC Capital Markets, DnB NOR and Calyon and joint lead arranger HBOS.

Despite the acquisition being funded and closing in sterling, the facilities have been redenominated in US dollars and include US$1.6685bn of senior secured facilities.

Debt is split between a US$404.2m amortising seven-year TLA paying 300bp over Libor, a US$472.2m eight-year bullet TLB paying 350bp, and a US$472.2m nine-year bullet TLC paying 400bp. The deal includes a US$175m institutional carve-out of the TLB and TLC. Unfunded tranches include a US$160m RCF and a US$160m capex/acquisition facility, both priced at 300bp. Junior debt is a huge US$724.4m 10-year mezzanine facility which has been largely pre-placed. The mezz pays 10% – 4.25% cash and 5.75% PIK – and comes with call protection: non-call two, 102, 101. Ticket sizes are US$60m, US$40m and US$25m, with fees of 145bp, 112.5bp and 87.5bp respectively. Leverage is 3.94 for senior and 6.06 for total, and equity represents 51.5% of the total net capitalisation.


Target nation: UK

Date announced: 23/07/08

Acquirer: Lion Capital

Total value: £1.1bn

Arranger: JPMorgan

Financing: £730m

Sole bookrunner JPMorgan has underwritten a £730m debt package backing private equity sponsor Lion Capital’s secondary buyout of FoodVest, a UK-based frozen food processor, from CapVest.

CapVest formed the £1bn-turnover company in 2006 by merging Young’s, Findus and the Seafood Company. FoodVest has 6,000 employees across 21 facilities in five countries.

The deal is the biggest UK buyout so far this year, and the largest sole underwrite of a leveraged deal in Europe this year.

Debt will be split between £550m of senior facilities and £180m of mezzanine, which are likely to be formally launched to syndication after the summer. The deal is understood to have attracted reverse enquiry, which may see some form of early selldown or senior syndication prior to official launch. Debt, leverage and capital structure on the secondary buyout are lower and more conservative than an aggressive £745m refinancing amendment put in place by CapVest last year.

Under the new structure, leverage will fall to 3.9 times through senior and 5.3 times through total debt.

The 2007 deal featured CapVest as both sponsor and vendor, with CapVest selling the company to management and to another of its funds, CapVest Equity Partners II. Bookrunners were JPMorgan, Merrill Lynch, SG and UBS.

At the time, debt comprised a £75m seven-year term loan A at 200bp over Libor, a £200m eight-year term loan B at 237.5bp, a £156m nine-year term loan C at 287.5bp, a £60m seven-year revolver at 200bp, a £44m nine-year acquisition line at 287.5bp, a £100m 9-1/2-year second-lien tranche at 437.5bp and a £110m PIK loan.

Leverage was initially 4.75 times through senior, 5.75 times through the second lien and 6.85 times total.

An amendment took out £113.5m of mezzanine debt, repaid vendor notes and funded a dividend. The deal closed oversubscribed.

ISS Energie

Target nation: France

Date announced: 18/04/08

Acquirer: Industri Kapital

Total value: Unknown

Arranger: Credit Mutuel-CIC

Financing: €136.9m

Credit Mutuel-CIC as mandated lead arranger and bookrunner has closed syndication of the €136.9m loan supporting Industri Kapital’s buyout of ISS Energie and the refinancing of its earlier acquisition of IDEX Groupe.

Prior to launch of syndication BNP Paribas and CADIF both joined. In syndication the leads were joined by Banque Palatine, Compagnie Financière du Credit Mutuel, IKB Deutsche Industriebank, Montepaschi Banque, Natixis and SG CIB.

Debt is structured as a €23m seven-year term loan A1, a €25.2m seven-year term loan A2, a €9m eight-year term loan B1, a €11.7m eight-year term loan B2, a €10m seven-year revolver, a €13m seven-year Capex line and a €45m seven-year borrowing base facility that was not offered in syndication.

Industri Kapital bought-out IDEX Groupe in 2004. ISS Energie was previously held by ISS Global through ISS Holding France. The combined group will be an independent energy and environment services provider offering services such as the management of collective heating and cooling networks (public and private) as well as the technical maintenance of buildings and third-party management of utilities.


Target nation: Netherlands

Date announced: 10/06/08

Acquirer: Cinven

Total value: Undisclosed

Arrangers: BNP Paribas, ING and SG

Financing: €425m

BNP Paribas, ING and SG have launched syndication of a €425m debt package backing a secondary buyout of automotive parts maker Jost. Debt is made up of €75m in mezzanine with the balance of facilities as senior bank debt, split between €280m in drawn senior and €70m undrawn. Leverage is 3.5x through senior and 4.5x total.

Silverfleet Capital, formerly known as PPM Capital, is selling the German-based vehicle components manufacturer to sponsor Cinven, and says it is making a 47% return on its original investment.

When the then PPM Capital was still part of Prudential, it acquired Jost Group from private equity company Alpha Group in June 2005 for €320m. Jost employs around 2,000 people and had turnover of €445m in 2007.


Target nation: Germany

Date announced: 21/07/08

Acquirer: Capvis

Total value: €325m

Arranger: Unknown

Financing: Unknown

Swiss private equity sponsor Capvis Equity Partners has acquired KVT, a unit of German steel group Kloeckner in a €325m deal, supported by domestic Swiss lenders. Zuercher Kantonalbank is believed to be among them.

Maillefer Extrusion

Target nation: Switzerland

Date announced: 11/02/08

Acquirer: Alpha Groupe

Total value: Undisclosed

Arranger: Mediobanca

Financing: SFr221m

Bookrunner and MLA Mediobanca and MLA Nordea have closed syndication of the SFr221m senior facilities and SFr25m mezzanine facility financing the acquisition of Maillefer Extrusion by Alpha from Argos Soditic.

The senior debt tranches are made up of SFr50m seven-year amortising term loan A paying 225bp over Euribor, a SFr40m eight-year bullet term loan B paying 275bp, a SFr31m nine-year bullet term loan C paying 325bp and a SFr100m seven-year revolver paying 225bp. The SFr100m revolver includes a SFr75m guarantee facility to allow for the issuance of advance payments bonds. This has been sold to an insurance company active in this business. Since closing, senior facilities have been increased by SFr25m (guarantee facility only). Leverage at closing was 3.8x through senior and 4.6x through total.

Maison du Monde

Target nation: France

Date announced: 07/04/08

Acquirers: Apax and LBO France

Total value: Undisclosed

Arranger: Calyon

Financing: €230m

Bookrunners Calyon, Credit Mutuel-CIC and Natixis have launched general syndication of €230m seven and eight-year senior facilities backing Apax Partners and LBO France’s buyout of furniture retailer Maison du Monde. Commerzbank and IKB joined the deal pre-syndication. Mezzanine of €80m was underwritten by Euromezz.


Target nation: Greece

Date announced: 13/05/08

Acquirer: The Carlyle Group

Total value: €749m

Arranger: Dresdner Kleinwort

Financing: €550m

The €550m debt package supporting Carlyle’s buyout of Greek chemicals group Neochemiki has closed oversubscribed. Lead banks Dresdner Kleinwort, Emporiki Bank, Millennium Bank, Piraeus Bank and Proton Bank were joined by the National Bank of Greece before launch.

Senior debt was split between a €145m seven-year term loan A paying 225bp over Euribor, a €120m eight-year term loan B at 275bp, a €120m nine-year term loan C at 325bp, a €75m seven-year revolver at 225bp and a €50m seven-year capex facility at 225bp. An additional €40m subordinated tranche was pre-placed.

Leveraged based on 2007 EBITDA opened at 3.9 for senior rising to 4.3 for total debt.


Target nation: UK

Date announced: 21/12/07

Deal type: LBO

Acquirer: KKR

Total value: Unknown

Arrangers: Barclays, HSBC

Financing: £668.41m

Bookrunners Barclays and HSBC are understood to have closed the general syndication of debt backing KKR’s buyout of Northgate Information Systems. The deal struggled initially because of loose documentation and is understood to have closed with the leads long of the deal.


Target nation: France

Date announced: 25/07/08

Acquirer: Astorg

Total value: €200m-€300m

Arranger: ING

Financing: €190m

French sponsor Astorg has mandated ING as sole mandated lead arranger on its buyout of medical imaging and nightvision products maker Photonis.

The deal is backed by €152.5m of senior debt and €37.5m of mezzanine.

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% and comes with warrants and is non-call two. It has been preplaced 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.

Pret A Manger

Target nation: UK

Date announced: 22/02/08

Acquirer: Bridgepoint

Total value: Undisclosed

Arranger: Rabobank

Financing: £220m

Bookrunner and mandated lead arranger Rabobank has launched syndication of the £220m senior debt package backing Bridgepoint’s buyout of sandwich chain Pret A Manger. HSBC joined as mandated lead arranger ahead of syndication. The total financing structure includes senior and mezzanine loans.

Senior facilities include a £40m seven year term loan A paying 275bp, a £50m eight-year term loan B bullet paying 325bp, a £50m nine-year bullet paying 375bp. In addition, a £15m seven-year revolver pays 275bp and £30m seven-year amortising capex facility pays 275bp.

A £35m 10-year mezzanine bullet paying 450bp cash and 550bp PIK was placed with institutional investors ahead of syndication. Leverage is 3.6x senior and 4.6x total.

Russian Alcohol

Target nation: Russia

Date announced: 22/05/08

Acquirer: Lion Capital

Total value: Undisclosed

Arranger: Goldman Sachs

Financing: US$315m

The US$315m in senior secured credit facilities backing the buyout of Russian Alcohol by a consortium that includes Lion Capital, Goldman Sachs European Special Situations Group (GSESSG) and Central European Distribution Company (CEDC – a leading Polish vodka distributor), has launched. The facility is mandated to Goldman Sachs, ING, RZB and UniCredit as joint mandated lead arrangers and bookrunners.

The total net cash-pay leverage at closing is 2.49x with common equity and equity-like structures accounting for 78.2% of the capital structure. This is an unusually high equity component in a buyout, but many mid-sized companies in Russia and the CIS are considered to be high-growth prospects as incomes are still rising and consumption follows suit. Leveraged buyouts are few and far between in Russia and the CIS. Raising debt for the most recent example, the LBO of juice company Nidan Soki by Lion Capital, is not believed to have fared particularly well.

Mandated lead arrangers on the Nidan Soki debt, Goldman Sachs, UniCredit (CA-BA) and VTB, increased the margins on the senior tranche of the US$290m debt package in February this year, though this was believed to have been to little avail.

Russian Alcohol is said to benefit from being a growth company in a segment that is considered highly resilient. Its Green Mark vodka is the number three seller globally by volume behind Smirnoff and Absolut.


Target nation: UK

Date announced: 30/04/08

Acquirer: Warburg Pincus

Total value: £565m

Arranger: RBS

Financing: £300m

Bookrunners ING and RBS have now closed general syndication of facilities backing sponsor Warburg Pincus’s tertiary buyout of Safety-Kleen Europe from JPMorgan Partners and CCMP Capital Advisors. The deal closed oversubscribed on both senior and mezzanine tranches. Senior debt sold mainly to banks, though institutional investors have committed to the deal.

Debt includes £530m of senior and £105m of mezzanine. Senior debt is made up of a £60m seven-year term loan A paying 275bp over Libor, an £85m eight-year term loan B paying 337.5bp, an £85m nine-year term loan C paying 387.5bp, and £20m of capex facilities and a £10m revolving credit facility, both seven-year and paying 275bp.

An additional £105m of 10-year mezzanine pays 975bp. Leverage is 4.4x through the senior debt and 6.5x in total.


Target nation: UK

Date announced: 23/07/08

Acquirer: Hellman & Friedman

Total value: £198m

Arranger: Barclays

Financing: £80m

Hellman & Friedman has mandated Barclays, HSBC, Lloyds TSB and RBS to arrange an £80m debt backing its £198m buyout of listed IT company SSP Holdings. UK-based SSP provides IT services to the insurance sector.

The debt supports Hellman & Friedman’s equity contribution of £111.2m and SSP management team’s rollover of a significant portion of their current 27% equity holdings in the business.


Target nation: Belgium

Date announced: 04/07/07

Acquirer: CVC

Total value: €800m

Arranger: Dresdner Kleinwort

Financing: Unknown

CVC has launched general syndication of the debt supporting its €800m buyout of Taminco of Belgium, which produces alkylamines and derivatives used in the chemicals industry. The buyout was originally announced in July last year. Bookrunners are Dresdner Kleinwort, Merrill Lynch, Rabobank and non-active bookrunner Fortis.

General syndication follows a senior phase aimed at relationship banks.

Debt of €600m is made up of a €100m seven-year revolver paying 225bp over Euribor, a €99m seven-year term loan A paying 237.5bp, a €180m eight-year term loan B paying 275bp and a €180m nine-year term loan C paying 325bp.

The deal also includes a €120m second-lien tranche, which has been pre placed – either priced up to mezzanine-type levels and sold or held by the bookrunners.

TMF Group

Target nation: Netherlands

Date announced: 17/07/08

Acquirer: Doughty Hanson

Total value: €750m

Arrangers: ING and UBS

Financing: €445m

ING and UBS have arranged a €445m debt package to back Doughty Hanson’s secondary buyout of TMF Group from Silverfleet.

TMF provides outsourced management and accounting services. It has grown through a string of international acquisitions and has a staff of 25,000 professionals in 79 offices.

Debt facilities include €265m of senior term facilities, a €100m mezzanine facility and €80m of undrawn facilities in the form of a revolver and an acquisition facility.

The capital structure includes over 50% equity contribution from Doughty Hanson and management. UBS also acted as exclusive financial adviser to Silverfleet Capital and TMF.

Xella International

Target nation: Germany

Date announced: 15/07/08

Acquirers: PAI and GS Capital Partners

Total value: Undisclosed

Arranger: BNP Paribas

Financing: €820m

Debt backing the LBO of Xella International has been arranged by global co-ordinators and mandated lead arrangers BNP Paribas, RBS, UniCredit (HVB) and MLAs Calyon and LBBW.

Facilities back the PAI Partners and GS Capital Partners acquisition of the German construction supplies business.The all-senior deal is made up of €820m of drawn A, B, C facilities and €120m of undrawn facilities. Leverage is 2.9 through total debt. The deal is supported by a strong vendor loan and equity contribution.

The acquisition is expected to be completed before the end of the summer. Leads said that in addition to the five arranging banks, a number of others have already committed to the deal.

Xella operates in Germany and Eastern Europe. People familiar with the matter said the deal had already attracted reverse enquiry thanks to low leverage and the company’s exposure to the Eastern European rather than more developed and troubled West European property sector.

Source: IFR/EVCJ