LBO Syndications arranged June

Alliance Boots

Target nation: UK

Date announced: 25/04/07

Deal type: LBO

Acquirer: KKR

Total value: £10.0bn

Arrangers: Deutsche Bank and others

Financing: £9.02bn

The initial sell-down of around £3bn of hung senior and second-lien Alliance Boots debt is in effect complete, though the process has yet to close formally. Bankers said that not only was there sufficient liquidity to move the portion of debt sold, but further disposals could have followed if the full underwriting group had been minded to sell.

The bulk of debt sold is half of the original £5bn term loan B at 91% of face value. In addition, a substantial portion of the £1bn second-lien tranche was also sold, with observers suggesting GS Mezzanine Partners was the sole buyer at 85.

Deutsche Bank, JPMorgan, Citi, Banc of America, Merrill Lynch and RBS are each selling some or all of their exposure. Barclays and UniCredit opted to hold their portions of the loan rather than sell at a discount. People familiar with the matter say each of those who did opt to sell decided how much to sell and whether or not to provide leverage to buyers.

The minimum ticket for the senior piece is understood to have been around £50m and is likely to have been larger again for leveraged investors. The original £9.02bn package supported KKR and Stefano Pessina’s buyout of Alliance Boots.

The most active buyers of hung big ticket leveraged loans are credit opportunity funds set up by private equity firms such as Apollo, Blackstone and TPG as well as by hedge funds, specifically to target performing debt offered at deep discounts. The discount offered was certainly sufficient to secure commitments, overwhelmingly so when combined with the offer of substantial leverage.


Target nation: UK

Date announced: 08/02/08

Deal type: LBO

Acquirer: Montagu

Total value: £1.7bn

Arrangers: Barclays and others

Financing: £1.14bn

Biffa‘s £1.14bn buyout debt package is in documentation and set to allocate after general syndication closed with oversubscriptions across all tranches. Bookrunners Barclays, Credit Suisse, HBOS, HSBC and RBS launched syndication of the £860m senior and £280m mezzanine loans backing Montague and GIP’s buyout of the UK waste management business in late April.

Senior debt is split between a £180m seven-year amortising A tranche paying 275bp over Libor, a £270m eight-year B tranche paying 250bp, a £270m nine-year term loan C paying 400bp, a £90m seven-year revolver paying 275bp and a £50m seven-year capex facility paying 275bp. The £280m 10-year mezzanine tranche pays 425bp cash and 550bp PIK.

Banks were invited to join as a joint lead arranger on a £40m ticket paying 150bp or an arranger for £20m paying 100bp. There is an institutional carve-out for funds on the B and C tranches.


Target nation: UK

Date announced: 22/02/08

Deal type: LBO

Acquirer: First Reserve

Total value: C$3.7bn

Arrangers: BoI and others

Financing: US$600m

Twelve banks joined during a senior phase which ran from April to the end of May: Bank of Ireland, Calyon, DZ, HSBC, HSH, Lloyds TSB, Marfin Popular Bank, Mediobanca, Natixis, Nordea and WestLB.

Debt facilities include: a US$300m term loan A paying 325bp, a US$275m term loan B paying 325bp and a US$275m term loan C paying 375bp. In addition, undrawn facilities comprise a US$150m revolver, a US$75m lease backstop facility (reduced from US$150m), a US$50m acquisition/capex facility and US$50m in letters of credit.

Banks are invited to join the general syndication on tickets of US$40m paying a 105bp fee and US$25m paying a 95bp fee. General syndication will focus mainly on banks, though some funds have also been invited.

CHC has its headquarters in Scotland and is the world’s largest provider of helicopter services to the global offshore oil and gas industry; some 60% of its revenues come from its European operations.

Private equity sponsor First Reserve specialises in energy industry buy-outs, including the buy-out of oilfield services company Abbot Group, agreed in December.


Target nation: Germany

Date announced: 09/05/08

Deal type: LBO

Acquirer: 3i

Total value: €133m

Arranger s: BoI and others

Financing: €95m

Bank of Ireland and Dresdner Kleinwort are set to wrap up syndication of senior debt facilities for 3i’s buyout of DruckChemie from a consortium led by SG Capital Europe. Leads said the deal raised a comfortable oversubscription, having been shown to a mix of new and existing lenders.

Senior facilities were made up of a €25m seven-year amortising term loan A paying 237.5bp over Euribor, a €20m eight-year bullet term loan B paying 287.5bp, a €20m nine-year bullet term loan C paying 337.5bp, a €10m seven-year revolver paying 237.5bp and a €20m seven-year capex facility paying 237.5bp. A mezzanine tranche was provided by European Capital.

Leverage based on 2007 EBITDA opened at 4.1x senior. DruckChemie provides inventory management and waste collection services to the graphic arts industry and produces specialist chemical print products.


Target nation: Germany

Date announced: 03/06/08

Deal type: LBO

Acquirer: Carlyle

Total value: Undisclosed

Arranger: BoI and others

Financing: €1.25bn

CVC has mandated Bank of Ireland, Calyon, Heleba, LBBW, Lloyds TSB, Mediobanca, RZB and WestLB to underwrite a €1.25bn debt package backing its purchase of a 25.01% stake in German industrial group Evonik.

The debt includes a €1.2bn five-year term loan and a €50m five-year revolver, both paying 450bp over Euribor. Underwriters intend to syndicate the debt that is structured at the acquisition vehicle level and accounts for about 50% of the €2.4bn purchase price,

The five-year tenor reflects the intention of both CVC and Evonik’s main shareholder – the state-backed RAG Holdings – to launch an IPO of the business within the next five years. The shorter tenor may also help in selling down the debt to local lenders.


Target nation: UK

Date announced: 17/04/08

Deal type: Public to private

Acquirer: Umbrellastream

Total value: £1.73bn

Arrangers: RBS and others

Financing: Unknown

RBS, Lloyds TSB, Royal Bank of Canada, HSBC and DnB NOR Bank are understood to be backing the latest increased cash offer for Expro by Umbrellastream, a consortium led by Candover, with Goldman Sachs and Alpinvest. The same banks backed a £1.605bn bid in April, raised to £1.73bn earlier this month and now to £1.806bn.

Expro’s shareholders have already approved a scheme of arrangement by which Umbrellastream could take over the company. However, Expro’s board has not ruled out recommending a competing bid from US oil rival Halliburton, if it were to raise its 1525p per share proposed cash offer before June 20.


Target nation: Germany

Date announced: 07/04/08

Deal type: Secondary

Acquirer: Industri Kapital

Total value: Undisclosed

Arranger: UniCredit

Financing: £205m

Bookrunner and mandated lead arranger UniCredit (HVB) has closed syndication of the €205m debt package backing IndustriKapital’s buyout of Flabeg from EquiVest/CBR. Leads said the deal closed with a robust over-subscription. Facilities were allocated on May 30.

Landesbank Rheinland-Pfalz (LRP) and HSH joined as joint lead arrangers ahead of syndication. The debt is split between a €175m senior loan and a €30m mezzanine piece.

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: France

Date announced: 08/03/08

Deal type: LBO

Acquirer: Alpha Associes

Total value: Undisclosed

Arranger: Barclays

Financing: €128m

Bookrunner and mandated lead arranger Barclays have closed syndication of a €128m deal backing Alpha Associes’ buy-out of French fish processing business Friel. Fortis and CADIF joined as mandated lead arranger. The deal closed with a large oversubscription. Senior debt is split between a €52m seven-year term loan A paying 225bp, a €27m eight-year term loan B paying 275bp, a €10m nine-year term loan C paying 325bp and a €12.5m 12-year revolving credit facility paying 225bp. A further 422.5m 10-year mezzanine tranche has been preplaced with three funds and was also arranged by Barclays. Leverage is 3.7x through the senior debt and 4.8x through the total.


Target nation: UK

Date announced: 15/12/07

Deal type: LBO

Acquirer: 3i

Total value: Unknown

Arrangers: Barclays and SG

Financing: £282m

Bookrunners and mandated lead arrangers Barclays and SG have closed and allocated the £232m loan backing 3i’s buyout of Inspicio. HSBC joined as an mandated lead arranger ahead of general syndication, which was launched in March. The deal targeted banks only and closed fully subscribed.

Debt is split between £180m senior term loans, a £55m revolver and a £47m mezzanine tranche that was pre-placed. Banks were invited to join on tickets of £20m paying 125bp or £15m for 100bp. Proceeds fund the buyout and refinance debt. Inspicio is a UK-based testing and environmental services group.


Target nation: Netherlands

Date announced: 10/06/08

Deal type: Secondary buyout

Acquirer: Cinven

Total value: Undisclosed

Arrangers: BNP Paribas, ING and SG

Financing: €425m

BNP Paribas, ING and SG have been mandated to arrange 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. The deal is expected to launch before the summer.

Silverfleet Capital, formerly known as PPM Capital, is selling the Germany-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: Norway

Date announced: 28/05/07

Deal type: Acquisition

Acquirer: Ineos

Total value: Unknown

Arranger: Barclays and others

Financing: €620m

Bookrunners Barclays and Merrill Lynch are in the market with the €620m debt package backing Ineos’ acquisition of Norsk Hydro‘s petrochemicals business Kerling. Ineos bought the business for NKr5.5bn in debt and equity. Debt is split between a €345m senior loan paying 350bp over Euribor, in turn split between a €305m 18-month term loan and a €40m 18-month revolver. In addition there is a further €275m two-year mezzanine loan paying 10%, split between 5% cash and 5% PIK. The deal is collateralised against both Kerling assets and a pledge to Ineos stock.


Target nation: Greece

Date announced: 13/05/08

Deal type: LBO

Acquirer: The Carlyle Group

Total value: €749m

Arrangers: Dresdner Kleinwort and others

Financing: Unknown

Carlyle Group has mandated Dresdner Kleinwort, Emporiki Bank, Millennium Bank, Piraeus Bank and Proton Bank to underwrite debt financing its buyout of listed Greek chemicals company Neochimiki. National Bank of Greece has joined the group. The debt is structured as a standard LBO package and is expected to launch at the end of May. According to the arrangers the deal benefits from a strong equity contribution and a high level of asset backing. Neochimiki makes and distributes chemical raw materials, fertilisers and raw materials for the coatings industry.


Target nation: UK

Date announced: 21/12/07

Deal type: LBO

Acquirer: KKR

Total value: Unknown

Arrangers: Barclays, HSBC

Financing: £668.41m

KKR has bowed to investor pressure and tightened loan documentation in its buyout of Northgate through Barclays and HSBC, after investors shied away from the deal, which many felt failed to recognise market realities. The tighter terms of the deal now mean a dividend will be paid out after leverage reaches 3.5, rather than 4, the first test is moved from April to January and a cash sweep will be applied when free cashflow hits £10m rather than £12.6m.


Target nation: Germany

Date announced: 02/06/08

Deal type: LBO

Acquirer: Barclays and Taros

Total value: Undisclosed

Arranger: DZ and others

Financing: €265m

Bookrunners and mandated lead arrangers DZ Bank and UniCredit HVB have launched a joint lead arranger phase of syndication of the €265m credit facilities backing the secondary buy-out of Novem by Barclays Private Equity from Taros Capital.

Leads described initiation of the senior phase as a quiet launch.

GE Commercial Finance joined the transaction as mandated lead arranger and bookrunner early in the process.

The total credit arrangement consists of senior and mezzanine facilities. Opening net leverage is 3.9x total debt.

Germany-based Novem manufactures interior trims for the automotive industry, with a market share of 46% in wood trims and 25% in metal trims. It reported sales of €287.2m for the financial year ending on March 31 2008.

Russian Alcohol

Target nation: Russia

Date announced: 22/05/08

Deal type: LBO

Acquirer: Lion Capital

Total value: Undisclosed

Arranger: Unknown

Financing: See below

Lion Capital has taken a majority stake in Russian alcohol distributor Russian Alcohol Group. Alongside Lion Capital, Central European Distribution Corporation is making an equity investment of US$156.5m for a 40% stake, with Goldman Sachs also investing in the equity.

The deal follows Lion Capital’s buyout of soft drinks distributor Nidon Soki in a deal backed by Goldman Sachs as debt provider. Russian Alcohol employs some 3,500 people and has revenues of US$500m.


Target nation: UK

Date announced: 30/04/08

Deal type: Tertiary

Acquirer: Warburg Pincus

Total value: £565m

Arranger: RBS

Financing: £300m

RBS has launched general syndication of facilities backing sponsor Warburg Pincus’ tertiary buy-out of Safety-Kleen Europe from JPMorgan Partners and CCMP Capital Advisors.

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 along with £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: 05/03/08

Deal type: Secondary

Acquirer: Charterhouse

Total value: £514m

Arranger: RBS

Financing: £357m

Bookrunner RBS has closed syndication of the debt backing Charterhouse Capital Partners‘ £514m buyout of Tunstall Group from Bridgepoint. Commitments were scaled back after the deal closed oversubscribed. The debt includes £155m of senior facilities, comprising an amortising seven-year term loan A paying 275bp over Libor; a £60m eight-year bullet term loan B paying 362.5bp and a £60m nine-year bullet term loan C paying 387.5bp.

The facilities also include a £10m seven-year revolver paying 275bp and a £72m 10-year mezzanine facility, which was fully syndicated before general syndication. Pro forma leverage is 4.3 senior and 6.3 total. Tunstall is a provider of telecoms care solutions, providing alarms for elderly, disabled and vulnerable people.

Z&J Technologies

Target nation: Germany

Date announced: 14/03/08

Deal type: LBO

Acquirer: ILP Funds

Total value: Unknown

Arranger: Commerzbank

Financing: €90.5m

Mandated lead arranger and bookrunner Commerzbank has closed syndication of €90.5m of senior facilities backing the acquisition of Z&J Technologies by sponsor ILP Funds, advised by J. Hirsch & Co.

Syndication closed oversubscribed, with mainly bank commitments and one insurance fund investing.

The business was acquired in a secondary buy-out from Germany-based Equita. The buyout transaction closed on March 7. Z&J manufactures mostly customised heavy-duty valves and equipment for the petrochemical, iron & steel and glass industries.

Source: IFR Loans/EVCJ