Target nation: Germany
Sponsor: BC Partners
Brenntag, a German chemical distributor, is the latest private equity owned credit to seek lender approval for an IPO. The BC Partners’ owned group is out with an amendment to its debt that will see increased margins in return for changes that include allowing equity proceeds to repay mezzanine debt.
If the changes proceed, senior and junior margins will increase by 175bp. In addition, lenders will earn a 75bp fee while early birds responding by December 4 will receive a further 25bp. The final deadline is December 9.
The listing will reduce Brenntag’s leverage to less than 3. Should leverage fall below 2.75 then the group will be able to ask lenders to repay second-lien debt. From an initial total debt leverage ratio of 6.4, the group is now leveraged at around 3.6.
BC Partners bought out Brenntag in 2006 in a transaction backed by a €2.5bn debt package. Deutsche Bank and Goldman Sachs led the deal, which was re-priced in 2007 to take account of a quicker than expected fall in leverage. That transaction left the senior revolver, A, B and C loans paying respective margins of 200bp, 175bp, 200bp and 225bp, with the second-lien loan paying 400bp.
The request follows a similar amendment for Gartmore, a UK fund manager, and for Medica, a French care homes group.
Target nation: Bulgaria
Arrangers: Avenue Capital and others
EQT has put in place a €125m debt package to support its acquisition of Bulgarian Eurocom Cable and a majority stake in CableTel Bulgaria and Macedonia. With Calyon and ING coordinating, other initial mandated lead arrangers are Avenue Capital, UniCredit and WestLB. The leads now intend to launch a further syndication.
The all-senior debt package is split between a €45m six-year amortising term loan paying 500bp over Libor, a €45m seven-year term loan paying 600bp, a €12.5m six-year committed acquisition facility at 500bp, an up to €17.5m uncommitted six-year acquisition facility, and a €5m six-year revolver, also paying 500bp.
EQT has acquired Bulgarian Eurocom Cable from FiberNet, while the majority stake in CableTel was bought from a US-based entrepreneur. The private equity group now intends to merge the two entities and so create a major force in the Bulgarian digital TV and broadband markets.
Target nation: Italy
Sponsor: Investor group
Arrangers: Intesa Sanpaolo
Intesa Sanpaolo has been mandated to arrange the debt backing the €280m buyout of Esaote, an Italian diagnostic imaging systems company. A consortium of Ares Life Sciences, Intesa Sanpaolo, Equinox Two, MPS Venture and management are backing the buyout. The lead intends to syndicate the transaction.
Target nation: France
Sponsor: BC Partners
Medica, the BC Partners’ controlled French care home group, has passed an amendment to allow an IPO in Q1 of next year. In return lenders earned a 50bp waiver fee, with early birds receiving a further 25bp. RBS ran the amendment.
As well as relaxing the change of control clause, the amendments pave the way for a reduction in leverage from around 7 to 4–4.5. In addition, relationship banks have provided an €80m acquisition line.
As well as the fee, margins have been increased to 200bp on the term loan A and revolver, 225bp on the capex, 300bp on the term loan B and 325bp on the term loan C.
Target nation: UK
Sponsor: Montagu Private Equity
Private equity buyers are running a slide-rule over Survitec, which Montagu Private Equity has put on the block. The UK-based survival equipment company is being courted by Carlyle, Permira and Warburg Pincus.
The overall debt would be in the £200m to £300m range, banks say, with pricing in the 500bp to 550bp ballpark. In the current climate, pricing on a successful A loan in Europe would have to be at least 475bp and on a B loan 500bp to 525bp, banks say.