Banks have lined up a £1.75bn-equivalent leveraged loan financing backing Motor Fuel Group’s (MFG) £1.2bn acquisition of MRH, the UK’s largest petrol station and convenience retail operator.
BNP Paribas, Goldman Sachs and HSBC are leading the debt financing alongside Deutsche Bank, ING, RBC and Societe Generale, the sources said.
The financing is set to comprise a £1.2bn-equivalent first-lien loan, of which £300m will be denominated in euros and a £285m second-lien loan. There is also expected to be a £265m revolving credit facility, the sources said.
The loan, which backs the acquisition and also refinances existing debt, is expected to launch for syndication in the coming weeks, the sources said.
MRH has an existing £280m term loan and a €260m term loan, while MFG has an existing £465m term loan, sources said.
MFG is owned by funds managed by Clayton, Dubilier & Rice and is the UK’s second-largest independent forecourt operator. The deal, announced on February 27, will create the UK’s largest operator by number of sites and number two operator by fuel volume.
The combined company will operate more than 900 company owned and franchisee-operated sites and manage third-party fuel, convenience, and food service brands.
These include fuel brands BP, Esso, Jet, Murco, Shell and Texaco and retail brands Budgens, Costa Coffee, Greggs, Spar and Subway, as well as the MRH-owned brand, Hursts. On a combined basis, MFG and MRH sold approximately 3.6bn litres of fuel in 2017.
The transaction is expected to close in the second quarter of 2018, subject to regulatory approvals.
CD&R declined to comment.