With the larger end of the LBO market running on empty for much of the year, the mid-market was, for a while, the only game in town. The winner of EVCJ’s Mid-market Debt Provider of 2008, ING, certainly benefited. It acted as lead arranger on 20 deals over the course of the year, worth a total of €11bn. The bank increased it European market share by loan volume to 5.4% from 3.18% in 2007, ING’s second highest figure over the last seven years.
The mid-market – defined here as deals worth less than €1bn, accounted for around 89% on all deals completed in 2008, up from 82% in 2007. Between December 2007 to October 2008, ING launched 23 such deals, accounting for €6.1bn of loan volume.
A high profile deal ING acted on was Euromedic. Euromedic is the largest pan-European private healthcare provider, and the only Central & Eastern European one. It was acquired by Ares Life Sciences and Merrill Lynch Global Private Equity, and ING underwrote the €553m debt package along with Unicredit and Bank of Ireland. ING has had a relationship with the company since 2005 when it solely underwrote Warburg Pincus and GE’s 2005 buyout, and in January 2008 it underwrote a €325m recapitalisation with Unicredit.
Due to the buy-and-build nature of the business, Euromedic required a large acquisition facility – €150m – and a debt package at 6x leverage. To secure market acceptance, ING structured the facility with a number of new terms restricting the usage of the facility, such as drawings subject to debt to equity ratio of 4:1, and the target has to have positive EBITDA. The senior phase was launched in July 2008, and the senior debt was oversubscribed.
The bank puts it success in difficult times down to its ‘local market’ strategy. It prides itself on being a local ‘on the ground’ player, an approach which has reaped its own rewards over the course of the year. It has 10 offices strewn across the world, with two in Asia, one in Central & Eastern Europe and another in New York. Its local presence equips ING with an understanding of the local LBO market environment, a source of local knowledge and relationships with local investors. It combines this with its global outlook, which allows the bank to provide clients with access to a knowledge base and relationships developed across its local network.