European medical laboratory services operator Cerba Healthcare is raising an additional €408 million leveraged loan to back an acquisition of France-based clinical analysis specialist Groupe Bio7, banking sources said.
Cerba announced that it had signed an exclusive agreement to buy Bio7 from French private equity firm Ardian on March 26.
The acquisition will be financed by the additional term loan and a share capital increase as well as €115 million of shareholder equity. The financing will also include €60 million of unsecured committed financing, according to the company’s press release.
The loan will also fund seven other bolt-on acquisitions of small labs in 2018, repay drawings under Cerba’s revolving credit facility, pay fees and expenses and be used for general corporate purposes and working capital requirements.
BNP Paribas, Deutsche Bank and Natixis are leading the covenant-lite loan and a bank meeting is set to take place on April 12, following the deal’s launch. Commitments are due by April 24. The covenant-lite loan will mature in April 2024 and pricing will emerge at the bank meeting.
Cerba was last in Europe’s loan market in March 2017 when it raised a €794 million, seven-year term loan B as part of a buyout financing backing its acquisition by European private equity firm Partners Group and Canada’s Public Sector Pension Investment Board (PSP Investments).
That deal priced with a tight margin of 300bp over Euribor, with a 0 percent floor at par. It was one of the first borrowers to achieve pricing of 300bp since the financial crisis, which is still viewed as a floor for single B issuers.
Partners Group and PSP Investments agreed to acquire Cerba from PAI Partners, the firms announced in January 2017. Cerba has over 4,500 employees, including 430 medical pathologists.
Groupe Bio7 is expected to contribute €48 million of pro-forma Ebitda to Cerba’s pro-forma adjusted Ebitda of €219 million for the twelve months ended December 31, 2017 after the Bio7 acquisition and seven bolt-on acquisitions.
By Claire Ruckin
(Editing by Tessa Walsh)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Cerba Healthcare SAS