LONDON (Reuters) – Montagu Private Equity’s 1.8-1.9 billion euros ($2.64 billion) sale of German wound care firm BSN Medical may be concluded this year despite tough loan market conditions, banking sources said on Wednesday.
The sale could be one of a handful of private equity purchases to be agreed between now and the end of the year as cash-strapped banks try to steer clear of new underwriting risk.
“I think we’ll get it (BSN Medical) done this year. We are still very confident we can do it and very much behind that deal — it’s one of the deals you can still do,” a head of leveraged loan syndicate said.
First round bids are due to be submitted on Friday, he said.
A mandate to arrange the financing could be awarded as early as October and the loan may be completed on a club basis, sources told Reuters Loan Pricing Corp.
In August, Montagu hired Morgan Stanley to look at the strategic options for BSN Medical. The firm is also arranging the staple financing for the purchase.
The sale is expected to attract considerable interest from private equity firms as the strongly-performing business is seen as a robust defensive play, a head of loan syndicate said.
BSN Medical has a strong track record in the European leveraged loan market and is a popular credit with investors.
Montagu financed its own 1.03 billion euro purchase of the company from Beiersdorf AG (BEIG.DE: Quote, Profile, Research, Stock Buzz) and Smith & Nephew Plc (SN.L: Quote, Profile, Research, Stock Buzz) with a 755 million euro financing arranged by JP Morgan and Mizuho.
(Reporting by Alasdair Reilly and Tessa Walsh; editing by Jon Loades-Carter)