Alliance Boots
Target nation: UK
Date announced: 25/04/07
Deal type: LBO
Acquirer: KKR
Total value: £10.0bn
Mandated arrangers: Deutsche Bank, JPMorgan, UniCredit (HVB), Barclays, Citi, Banc of America, Merrill Lynch and RBS
Financing: £9.02bn
Bookrunners have sold down close to 100% of Alliance Boots mezzanine tranche. The tranche accounts for £750m of the £9.02bn of financing backing KKR‘s take private of the UK group. The mezzanine piece had been the only part of the Alliance Boots deal actively marketed since July, when bookrunners Deutsche Bank, JPMorgan, UniCredit (HVB), Barclays, Citi, Banc of America, Merrill Lynch and RBS pulled the senior and second-lien tranches having failed to find investor support. The 10-year facility pays 650bp, increased from an initial margin of 600bp, and was sold to traditional mezzanine investors with tickets ranging from triple digits of millions to single digits. According to a bookrunner on the deal, the deal was offered at 95% of par, though sources away from the deal say discounts are likely to have been considerably more and negotiated with investors on a one-to-one basis. The suggestion that discounts were significantly deeper than 95% on the mezzanine piece reflects investors’ expectations of margins “no lower than 10%” .Mezzanine investors have been the most notable beneficiaries of the leverage finance squeeze. The evaporation of liquidity has seen their margins rise back towards historic levels while competing products such as second lien have been squeezed out of structures which also feature less senior debt and lower leverage.
Blythe Valley Business Park
Target nation: UK
Date announced: 10/09/07
Deal type: Acquisition
Acquirers: Doughty Hanson & Co Real Estate, and Liberty Property Trust
Total value: £161m
Mandated arranger: Natixis
Financing: £123.2m
The five-year c. £123.2m secured term loan backing the acquistion of Blythe Valley Business Park has been mandated to Natixis as bookrunner and mandated lead arranger. The sponsors are Doughty Hanson Real Estate Fund and Liberty Property Trust who acquired the property from British Land for £161m. Blythe Valley Business Park has 13 freehold properties and adjacent development land with full planning permission near Solihull in the West Midlands. The project currently has a total rental income of c. £8.2m p.a. Companies present include Ove Arup, Logica, Regus, Virgin and Oracle.
BTC
Target nation: Bulgaria
Date announced: 03/05/07
Deal type: Secondary buyout
Acquirer: AIG Capital Partners
Total value: Unknown
Mandated arranger (s): UniCredit
Financing: €1.6bn
Deutsche Bank, RBS and UBS acting as bookrunners with mandated lead arranger UniCredit are likely to launch general syndication of the €1.6bn debt supporting the buyout of the Bulgarian Telecommunications Company (BTC). Formal syndication would follow an informal joint lead arranger phase that was ongoing through the summer and early autumn. The deal backs the buyout of 65% of BTC by AIG Global Investment Group.
ELIS
Target nation: France
Date announced: 08/08/07
Deal type: Secondary buyout
Acquirer (s): Eurazeo
Total value: €2.28bn
Mandated arranger (s): BNP Paribas
Financing: €1.85bn
Eurazeo has confirmed BNP Paribas as mandated lead arranger on its €2.28bn buyout of Elis from PAI. The deal was agreed in August and completed in early October with a €1.85bn debt quantum.
Healthcare at Home
Target nation: UK
Date announced: 01/08/07
Deal type: Secondary buyout
Acquirer (s): Hutton Collins
Total value: £200m
Mandated arranger (s): Landsbanki, Nomura
Financing: £145m
Nomura as mandated lead arranager and bookrunner with Landsbanki as mandated lead arranger has closed oversubscribed the £175m senior and subordinated debt package to support Hutton Collins‘s buy-out of Healthcare at Home. Senior debt was split between a £45m eight-year term loan B priced at 275bp over Libor, a £45m nine-year term loan C at 325bp and a £25m seven-year revolver at 225bp. In addition there is a £15m 9-1/2 year second-lien at 500bp, a £15m 10-year mezzanine piece at 400bp cash and 500bp PIK and a £30m PIK. Leverage was set at 5.1x senior rising to 6x through the second-lien and up to 6.9x through the mezzanine.
HSS
Target nation: UK
Date announced: 13/07/07
Deal type: Secondary buyout
Acquirer (s): Aurigo and Och-Ziff Capital Management Group
Total value: £310m
Mandated arranger (s): Barclays and SG
Financing: £260m
The £260m loan backing the buyout of HSS, the UK tool hire business, by Och-Ziff has also launched through mandated lead arrangers Barclays and SG. Debt is split between a £90m eight-year term loan B priced at 275bp, a £90m nine-year term loan C at 325bp, a £40m seven-year capex line at 225bp, a £20m seven-year revolver at 225bp and a 9-1/2 year £20m second-lien piece priced at 525bp. Lenders are invited to join on tickets of £20m earning 150bp or £15m paying 125bp. The leverage is 4.3x in total and 3.9x on the senior debt. HSS is being sold by 3i for around £300m.
Miles 33 Group
Target nation: UK
Date announced: 11/06/07
Deal type: LBO
Acquirer (s): European Capital
Total value: Undisclosed
Mandated arranger (s): Bank of Ireland and Lloyds TSB
Financing: £31m
European Capital has completed the buyout of Miles 33 Group. European Capital’s investment takes the form of equity, subordinated debt and senior loan facilities. As a result of the investment, European Capital is the majority shareholder of Miles 33 with approximately 60% ownership. Miles 33’s previous owners and senior management also invested in the Company as part of the buy-out and hold the remaining 40%. Bank of Ireland and Lloyds TSB Bank each provided £15m of loan term facilities with Lloyds TSB providing an additional £1m revolver.
Nidan Soki
Target nation: Russia
Date announced: 06/08/07
Deal type: LBO
Acquirer (s): Lion Capital
Total value: c. €350m
Mandated arranger (s): VTB
Financing: US$290m
The senior debt backing the first leveraged buyout in Russia, the acquisition of the fruit juice company Nidan Soki by Lion Capital, has been launched. The bookrunners are Goldman Sachs and UniCredit (CA-BA). VTB is a mandated lead arranger. The senior debt totals US$290m. It comprises a US$100m six-year A loan priced at 325bp, a US$100m seven-year B loan at 375bp and a US$30m revolver together with a US$60m capex facility, both paying 325bp. Banks are invited in on tickets of US$25m for 90bp and US$12.5m for 75bp. The arrangers say they have structured the deal with the aim of getting lenders “comfortable with a workable debt push-down”. They believe it could provide a template for further leveraged deals in Russia, which is still a largely untapped market from the private equity point of view. Following several years of strong economic growth, Russia is now considered a draw for large private equity companies, with sufficient volume to warrant them setting up a permanent presence. A number of sectors in Russia are booming on the back of buoyant commodity prices, particularly the food and drink and retail segments as consumers continue to see an increase in their disposable incomes.
Rhiag Group
Target nation: Italy
Date announced: 07/08/07
Deal type: LBO
Acquirer (s): Alpha Private Equity
Total value: Undisclosed
Mandated arranger (s): ING
Financing: €295m
Mandated lead arranger and bookrunner ING launched a €295m package supporting Alpha Private Equity‘s buyout of Rhiag Group from CVC. The deal closed in August and general syndication follows a joint lead arranger phase with Natixis, GE and IKB all joining.
Senior debt is split between a €75m term loan paying 225bp over Libor, a €75m eight-year term loan B at 275bp, a €75m term loan C at 325bp and a €20m revolver. In addition there is a €10m second-lien piece paying 500bp and a €40m mezzanine tranche already placed with Mezzanove and VerCapital. An investors’ meeting is scheduled for October 23.
Saur
Target nation: France
Date announced: 19/03/07
Deal type: Secondary buyout
Acquirer (s): HIME
Total value: Unknown
Mandated arranger (s): Natixis and the Royal Bank of Scotland
Financing: €1.94bn
Sole bookrunner BNP Paribas has launched general syndication for the €1.94bn infrastructure financing backing the acquisition of Saur, France’s third largest water and waste management services business by the Holding d’Infrastructures et des Metiers d’Environnement (HIME) acquisition group. Mandated lead arrangers are Natixis and the Royal Bank of Scotland.
The general phase follows a senior syndication which closed in July with 11 banks joining the transaction: Bank of Scotland, Bank of Tokyo-Mitsubishi UFJ, Banque Palatine, Dexia Crédit Local, Fortis and Société Générale joined as joint lead arrangers and BBVA, CIC, ING, LCL – Le Credit Lyonnais and Mizuho joining as Arrangers. Saur has sales of €1.4bn and EBITDA of €161.7m in end of year March 2007. HIME is owned by Caisse des Depots (47%), Seche Environnement (33%) and infrastructure funds managed by Axa IM (20%). The consortium bought a 100% interest in Novasaur the holding company which owns Saur Group.
Selling sponsor PAI acquired Saur in 2005 for €1.037bn in a transaction backed by a €925m debt package arranged through BNP Paribas and SG.
SLV
Target nation: Germany
Date announced: 25/07/07
Deal type: LBO
Acquirer (s): Hg Capital
Total value: €320m
Mandated arranger (s): Dresdner Kleinwort
Financing: €220m
Dresdner Kleinwort is out with a €220m debt package supporting HgCapital‘s buyout of SLV. Debt here is split between a €170m senior loan and €25m tranches of second-lien and mezzanine debt.
HgCapital is to become the majority shareholder in SLV Group, one of the fastest growing manufacturers of innovative lighting systems in Europe. The company’s founder and current managing director Franko Neumetzler, who has hitherto held the majority of SLV’s capital, will retain a significant minority stake in the company in the future, with the other members of management also continuing to hold shares.
Thule
Target nation: Sweden
Date announced: 31/05/07
Deal type: Secondary buyout
Acquirer (s): Nordic Capital
Total value: Undisclosed
Mandated arranger (s): Nordea
Financing: Unknown
Nordea which has closed syndication of SKr7bn in senior facilities backing Nordic Capital‘s secondary buyout of Thule from Candover. Syndication of senior and second-lien was targeted to a relationship group. The senior piece was fully signed on September 20. The mezzanine provider signed into the transaction by closing on July 27 2007. According to the bookrunner, demand for the deal was high enough for it to turn down commitments from some banks. Thule is a Swedish sports utility business, with products including rooftop boxes, roof rails, snow chains, towing systems and motor home accessories. It had pro forma sales of SKr6.6bn in 2006.
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