Abbot Group set to launch

This week sees bookrunner Goldman Sachs launch syndication of debt backing the £906m buyout of UK oil and gas services business Abbot Group.

The deal is among the largest buyouts underwritten since the market changes of June 2007, and a formal syndication will be closely watched by all elements of the market.

Sources suggest a group of senior banks have large hold targets and that the deal has already been well received, with a hit-rate of eight out of 10 banks targeted.

Launch of syndication follows Friday’s confirmation by Abbot Group that the takeover scheme for the acquisition by sponsor First Reserve has become effective.

In December Abbot agreed to a 390 pence per share all-cash takeover bid from First Reserve, through its investment vehicle Turbo Alpha. The deal valued the business at £906m.

Since then the US-based sponsor has emerged as a significant player in European leveraged finance. As well as the Abbot deal, First Reserve has agreed a C$3.7bn deal to buy UK helicopter operator CHC, with debt underwritten by Morgan Stanley.

This week the same sponsor agreed a third deal, to buy the solar energy business of Spain’s Gamesa Corporacion Technologica for €261m.

Barclays and SG launch Inspicio

Barclays and SG have launched syndication of the £232m loan backing the buyout of Inspicio by 3i Facilities include £180m of senior term loans and a £55m revolving credit facility, a £47m mezzanine tranche has already been placed. Banks are invited to join on tickets of £20m, paying 125bp, and £15m paying 100bp.

The facilities both fund the buyout and refinance some existing debt. Inspicio is a UK-based testing and environmental services group.

Also in syndication is Media&Broadcast, which through physical bookrunners BNP Paribas and Goldman Sachs with bookrunners ABN AMRO, Calyon, Dexia and SG, is reported to be winning good commitments. The leads are suggesting it will close with a small oversubscription next week.

The bulk of interest has come from banks, though some fund commitments suggest that part of the market is prepared to invest in primary deals offering far less than the spreads available in the secondary market.

RBS mandated for Tunstall

RBS has been mandated as bookrunner backing Charterhouse Capital Partners‘ £514m buyout of Tunstall Group from Bridgepoint.

Tunstall is a UK-based provider of monitoring systems for the elderly and infirm, with products including care alarm systems for private and care homes, software for use by monitoring centres to respond to alarms and the outsourced management of call centres on behalf of local authorities and related support services.

Bridgepoint acquired the business in a £225m deal in June 2005 and is understood to have achieved a 2.5x money multiple from its investment.

MBO for Cygnet

Cygnet Health Care, a psychiatric care homes operator, has been bought out by its management with backing from healthcare group Grove Limited and financing from a consortium of banks led by RBS. The company was valued at £340m–£280m in equity, plus £60m in debt.

The RBS-led bank consortium will provide £165m in term loans, new development financing and a revolving working capital loan. The refinanced business is expected to be in a position to expand through acquisition.

Grove Limited, controlled by Irish horse racing tycoons John Magnier and JP McManus, has held a 25% stake in Cygnet since 2004. It also owns Barchester Healthcare, a UK nursing home operator, which acquired Castlebeck from HgCapital for £255m in mid-2006 and Westminster Health Care from 3i for £525m in 2004.

Cygnet’s 450 managers and staff will have an 11% stake in the refinanced business, with the remainder held by founder John Hughes, chairman Ken Wilson and Grove Limited.

Cygnet operates 16 centres across the UK with more than 600 inpatient beds for private and NHS-funded patients.