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Cinven and Bain Capital have secured €3.175bn of debt commitments from banks to finance their acquisition of German drugmaker Stada, in what is set to be Europe’s largest sub-investment grade LBO financing so far this year.
The two private equity houses won a fierce bidding war for the publicly listed company earlier this month, with a €66-a-share, €4.1bn takeover offer that will be the largest private equity acquisition of a publicly traded European company in four years, according to data from Dealogic.
The deal is backed with €3.175bn of debt, according to sources close to the deal, although around €400m of this takes the form of a revolving credit facility. This leaves €2.775bn of long-term committed financing to be taken out in the public debt markets.
This financing will include €2.435bn of senior secured debt, expected to be split between €1.95bn of term loans and €485m of bonds, with an additional €340m of senior unsecured debt also to be raised in the bond market. Tranche sizes are subject to change based on demand and market conditions, however.
One of the sources said that the plan is to raise all of the debt in euros, which would make it the largest LBO debt deal of its kind this year. He added that presentations to ratings agencies are scheduled for the middle of May, meaning the loan and bond syndication should be publicly launched in early to mid June.
Barclays is leading the senior secured loan, Citi the senior secured bonds and JP Morgan the senior unsecured bonds. Ten banks in total are said to have underwritten the deal.