Northgate NGA changes hands in debt-for-equity swap: Reuters


Nov 13 (Reuters) — Existing lenders to UK human resources software company Northgate NGA were told in a bank meeting on Friday that Goldman Sachs and Park Square Capital will take control of the company from owner KKR in a debt for equity swap, banking sources said.

Lenders were informed in a restructuring meeting that mezzanine lenders Goldman and Park Square will take ownership in a debt restructuring that will reduce Northgate’s leverage from around 8 times to around 4.5 times after fees and expenses, a source said.

KKR declined to comment.

Underwriters Goldman Sachs and Royal Bank of Scotland are expected to launch a £320m-equivalent first-lien term loan backing the recapitalisation of the company, formerly known as Northgate Information Solutions, in the next two weeks.

The loan will include the £320m-equivalent mixed-currency term loan and a £75m-equivalent revolving credit facility.

KKR took Northgate Information Solutions private in 2008, in a deal that valued the company at £593m plus existing debt.

KKR subsequently sold divisions including Northgate Public Services to Cinven for £320m in December 2014 and the managed services division to outsourcing group Capita for £65m in 2013.

UK-based Northgate provides payroll services for multinational companies like the BBC, BAE Systems and AstraZeneca, a source said, as well as mid-market companies.

After the restructuring, Goldman will control a majority stake via its merchant banking arm, followed by Park Square’s stake and KKR will maintain a smaller 5% stake.