Leveraged loans


Target nation: Spain

Sponsor: BC Partners

Arrangers: JP Morgan

Following some push-back from lenders on its proposed pre-IPO loan amendments, Amadeus is offering its lenders an additional 25bp on the margin to give an uplift of 150bp, and a further 25bp on the upfront fee to take it to 100bp. There will also be a dividend restriction of 75% of net income. Of the total upfront fee, 25bp is reserved for earlybirds. JP Morgan is leading.

If these revised terms are accepted, the margins on Amadeus’s debt would be around 375bp to 400bp. That is below the rates being paid on new leveraged deals, such as that for the buyout of Springer Science and Business Media.

The relative strength of the equity market has encouraged a number of companies that were geared up during the credit boom to approach lenders with pre-IPO amendments. These have proved popular – partly because of the additional income they represent and partly because the borrowers can use the equity injection to cut leverage in what remains a challenging economic environment. It is said that Amadeus would use €910m from its IPO to pay down debt, taking its leverage to below 3.5, thereby offering greater protection to its lenders. To encourage further reduction in gearing the amendment proposes that, if the company’s leverage falls below 2.5, its margins would be cut by 25bp.

Amadeus, which is a travel reservations group, went private in 2005 when BC Partners and Cinven took a 52.8% stake in the business. Air France, Iberia and Lufthansa hold the remainder with 23.14%, 11.57% and 11.57% stakes, respectively. The initial buyout was recapitalised in a €4.78bn loan in 2007, according to Thomson Reuters data.


Target nation: Germany

Sponsor: BC Partners

Arrangers: Unknown

The loan waiver to allow Brenntag, the German chemical distributor, to proceed with an IPO has passed, after some last-minute concessions. The borrower has agreed to pay an extra 25bp fee as well as increasing margins by a further 25bp.

Brenntag had initially offered to increase senior and junior margins by 175bp with a 75bp fee. Early birds were offered a further 25bp. The amendment will now allow Brenntag to proceed with a listing that is designed to reduce its leverage to less than 3x. 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. From an initial total debt leverage ratio of 6.4x, the group is now leveraged at around 3.6x.

Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and JP Morgan have all been mandated for the IPO, which will top €1bn. Lilja & Co is acting as adviser to the vendor.

British Car Auctions

Target nation: UK

Sponsor: Clayton, Dublier & Rice

Arrangers: Bank of America and others

UK private equity firm Montagu Private Equity has sold British Car Auctions (BCA), a vehicle remarketing business to Clayton, Dubilier & Rice (CD&R) for an undisclosed sum.

In October 2006, Montagu led the buyout of BCA from a collection of private shareholders. The business was divided into an operating company, which is being sold to CD&R, and a property arm that is being kept by Montagu.

The company mainly sells vehicles through physical auctions but has also begun an online business that is seeing great success that it predicts will continue into the future.

The company also provides additional services that include collections, deliveries, vehicle inspection, storage and vehicle preparation and cleaning.

Montagu was advised by UBS Investment Bank. Bank of America, Merrill Lynch, BNP Paribas Fortis, Commerzbank, HSBC, Investec, Lloyds TSB, Bank of Ireland and Royal Bank of Scotland acted as arrangers of the debt financing.


Target nation: UK

Sponsor: Apax Partners

Arrangers: Lloyds

Lloyds is out with the £300m debt package supporting Apax’s £975m acquisition of Marken.

Marken has an existing bank group to target, having last been in the market in 2007 when it closed a £250m loan supporting its ICG-led buyout. Lloyds also led that facility. Apax will be Marken’s third private equity owner, with the pharmaceutical support company first going private in 2006 when Deutsche Post sold the group to 3i.


Target nation: Germany

Sponsor: IK Investment Partners

Arrangers: BNP Paribas Fortis and Commerzbank

Minimax, a provider of fire protection systems, has closed a €75m debt package to support its acquisition of Viking Group, a US rival. BNP Paribas Fortis and Commerzbank led the facility, which was structured as an add-on and split between a €60m term loan and a €15m guarantee facility.

IK Investment Partners bought Minimax in 2006 from Investcorp. A €530m CIBC-led loan supported that transaction.


Target nation: Spain

Sponsors: CVC

Arrangers: ING and SG

Mivisa is offering to pay a 100bp waiver fee for amendment that will see repayment of a €72m second-lien facility and approximately €100m of senior debt.

Payment of the fee will be staggered with lenders receiving 40bp on signing and a 60bp on IPO. Early-bird replies will receive a further 20bp on signing and 40bp on IPO. Margins are also set for a 150bp uplift.

CVC acquired Mivisa, a Spanish plate maker, in 2005 in a buyout backed by a €460m loan. The deal was recapitalised in 2007 in a €662m deal through MLAs ING and SG.

New Look

Target nation: UK

Sponsors: Permira and Apax

Arrangers: Deutsche Bank

UK discount clothing retailer New Look has approached lenders for a pre-IPO amendment.

Deutsche Bank is leading New Look’s request. In return for the amendment the group will pay margins of 375bp and a 100bp fee.

Permira and Apax took New Look , private in 2004. The deal was recapitalised in 2005 with a £750m facility and then in 2006 through a £350m PIK note.

Springer Science & Media

Target nation: Germany

Sponsor: EQT and CIC

Arrangers: Goldman Sachs and others

German academic publisher Springer Science & Media (SSBM) has been acquired by a consortium comprising Swedish private equity firm EQT and GIC, the private equity arm of the Singaporean government, for an enterprise value of €2.3bn.

The deal, which provides an exit for European private equity firms Candover and Cinven, includes a new €150m loan and values the group’s equity at circa €100m. EQT is taking a 82% stake in the company and GIC an 18% holding.

Talks between the joint owners of SSBM and various other private equity firms have been rumbling on since the summer. Originally Candover and Cinven put up a 49% stake in the business for sale through an auction process, with offers expected in the region of €500m. But after that process failed, reflecting valuation issues, the owners decided to sell a majority stake in the business.

Listed fund Candover is under pressure to exit assets in order to raise capital, while SSBM itself is under pressure at a company level as it struggles to meet looming repayments on its €3.08bn debt pile.

SSBM was formed in 2003 when Candover and Cinven merged BertelsmannSpringer with Kluwer Academic Publishing in a deal that was financed with an €810m leveraged loan arranged by Barclays. The debt was refinanced three times between 2003 and 2006, also through Barclays, leaving the company with more than €3bn of debt.

According to a statement, the transaction remains subject to customary conditions, including regulatory approvals, and is expected to close by late January/early February 2010. The Springer board was advised by Goldman Sachs, UBS and Freshfields.

Source: IFR/EVCJ