Global coordinator and bookrunner Goldman Sachs and bookrunners Bank of Scotland, Lloyds TSB and RBS have launched the US$2.16bn credit facilities backing First Reserve‘s acquisition of oil services business Abbot Group. The deal is the largest European syndication launched since the credit crunch and will be among the most closely watched financings of the year. A JLA group is in place ahead of general syndication and a bank meeting will be held in London on 18 March. Facilities include US$1.55bn of senior tranches: these consist of a US$200m amortising seven-year term loan A paying 275bp over Libor, a US$500m eight-year bullet term loan B paying 350bp, a US$500m nine-year bullet term loan C paying 375bp and a US$100m seven-year bullet funded synthetic letter of credit facility paying 275bp. Unfunded tranches are a US$75m revolver, a US$125m capex/acquisition facility, and a US$50m revolving letter of credit facility, all priced at 275bp. The revolving letter of credit facility will not be syndicated. The financing also includes a US$615m equivalent 10-year secured bridge loan facility, which sources away from the deal say is priced as quasi mezzanine. With the high-yield bond market shut, that is the most challenging element of the deal. A source close to the situation said pro forma leverage is 3.73x through the senior and 5.65x total. The facility has an equity cushion of around 43% of the total pro forma capitalisation. Bank lenders have been offered pro rata tickets of US$40m for 100bps and US$25m for 85bps. Abbot Group is a UK-based oilfield services company that owns and operates onshore and offshore drilling rigs and provides drilling services to third parties. It operates in Europe, the Middle East, Russia, North and West Africa, and the Caspian Region. Sponsor First Reserve is the leading private equity firm specialising in the energy industry with over US$12.5bn under management.A similar syndication strategy is being employed by bookrunners Barclays and Goldman Sachs, who launched syndication of €863m of senior facilities backing the buyout of Dutch industrial consortium Stork by Candover. A JLA group is again understood to be in place, slashing the amount needed to be raised from the current phase.
• In December Candover agreed a €1.5bn offer for Stork by partnering with Icelandic consortium and Stork shareholders Landsbanki and Eyrir. Stork’s food business will be sold in an agreed follow-on deal to Marel Food Systems, part of the Icelandic consortium, resulting in a significant revision to the deal now in syndication. The initial syndication will be of €622m of senior debt and €241m of mezzanine. Post the food unit disposal debt will be cut to €416m of senior and €185m of mezzanine. Senior facilities include €150m of seven-year term loan A, paying 275bp over Euribor – this will fall to €100m; €236m of eight-year term loan B paying 325bp – this will fall to €158m; and €236m of nine-year term loan C paying 350bp, also falling to €158m. The €241m nine-and-a-half-year mezzanine tranche pays 10.75% and will be adjusted down to €185m post disposal. The deal includes a further €470m of working capital facilities.
• MLA and bookrunner Commerzbank has been mandated to lead the debt financing backing the acquisition of Z&J Technologies by sponsor ILP Funds, which is advised by J. Hirsch & Co. The business was acquired in a secondary buyout from Germany-based Equita. The debt package consists of €90.5m of senior facilities. Syndication of the senior facilities is already underway, with a number of early commitments from banks and an insurance company. The buyout transaction closed on 7 March. Z&J manufactures mostly customised heavy-duty valves and equipment for the petrochemical, iron & steel and glass industries.
Stepping into the breach
• ESML Intressenter AB, the investment vehicle of sponsors EQT Partners, SakI AB, Melker Schorling and Investment AB Latour, has completed its SKr10.1bn takeover offer for Securitas Direct, a Sweden-based domestic security services provider. Senior debt facilities have been arranged by MLA Nordea with mezzanine financing jointly underwritten by MezzVest, Partners Group and EQT. The underwriters joined the bid late, replacing banks originally mandated in December last year. The original offer in December was mandated to Bank of Scotland, Dresdner Kleinwort, RBS and SEB. The earlier underwrite was conditional on a 90% acceptance level that was not achieved, freeing the lenders from their obligation to the deal. A revised offer with a lower acceptance threshold has now been accepted, backed by the new lenders. ESML Intressenter said the conditions for draw-down from the new lenders are as favourable as those under the initial financing package. Securitas Direct is a leading service company offering high-quality security services based on a standardised range of alarm products to homes and small businesses.