Canadian pension fund Ontario Municipal Employees Retirement System has sealed additional financing for its acquisition of Scotland-based shipping services company V.Group, Reuters reported Friday. HSBC and Citi joined the Royal Bank of Canada in underwriting a $260 million loan for the acquisition. OMERS acquired V.Group in July from private equity firm Exponent for $520 million backed by leveraged loans solely underwritten at the time by RBC, Reuters wrote.
(Reuters) – HSBC and Citi have joined Royal Bank of Canada (RBC) in underwriting a $260 million loan for the acquisition by Canadian pension fund Ontario Municipal Employees Retirement System (OMERS) of Scotland-based shipping services company V.Group, banking sources said on Friday.
HSBC and Citi are acting as mandated lead arrangers (MLA) and bookrunners on the deal alongside RBC, while CIBC has also signed up as a MLA, the bankers said.
OMERS acquired V.Group in July from private equity firm Exponent for $520 million backed by leveraged loans solely underwritten at the time by RBC. [ID: nL6E7IS1H7]
The deal, which is set to launch for general syndication this month, consists of a $78 million loan A paying 475 bps over LIBOR; a $122 million term loan B paying 525 bps over LIBOR; a $40 million revolving credit facility paying 475 bps over LIBOR and a $20 million acquisition facility paying 475 bps over LIBOR, banking sources added.
Total leverage on the deal is 4.3 times earnings before tax, interest, depreciation, and amortisation.
Exponent agreed the sale to OMERS after talks with prior front runner Charterhouse Capital Partners broke down in July, after Charterhouse revised its offer and linked part of the payment to the future performance of V.Ships.
Exponent, which bought V.Group with management in 2007 backed by $267 million of debt according to Thomson Reuters LPC data, preferred an all-cash offer, sources close to the matter said.
Under Exponent’s ownership, V.Group has completed three acquisitions including Norway-based engineering consultancy RC Consulting in 2007, Dubai-based International Tanker Management in 2009 and Singapore-based underwater engineering company Maritime Underwater Maintenance and Services in 2010.
Formed in 1984, V.Group provides management and related marine services to the global shipping industry.
The Glasgow-headquartered company supplies services to a fleet of over 700 vessels and manages a crew roster of 24,000 staff. (By Claire Ruckin)