(Reuters) – British rail ticket retailer and information provider thetrainline.com has raised a 190 million pound ($298.69 million) loan to refinance existing debt and pay a dividend to its private equity owner Exponent, banking sources said.
Dividend recapitalisations, usually a feature of bull markets, have risen in Europe in 2013 as a lack of merger deals has led sponsors to look at other ways of getting value out of their portfolio companies.
Exponent bought thetrainline.com for 163 million pounds in 2006 from Virgin, backed by 116 million pounds of debt, according to Thomson Reuters LPC data. It hired Rothschild last year to sell the company, but the process failed after bids failed to meet price expectations in excess of 300 million pounds.
Instead, Exponent decided to conduct a dividend recapitalisation – a refinancing process that increases a company’s debt to allow a payout. Debt advisory firm Marlborough Partners advised on the process, banking sources said.
Exponent was not immediately available to comment and Marlborough declined to comment.
The dividend recapitalisation includes a 140 million pound unitranche loan paying 750 bps over Libor, provided by debt funds Ares Management, Babson Capital and BlueBay Asset Management as well as Bank of Ireland. There is also a 50 million pound revolving credit facility provided by Barclays and HSBC, banking sources added.
Trainline was formed in 1999 to sell rail tickets online and through call centres. In addition to its website, it operates retail websites for the majority of the train operating companies and serves a number of major corporations and travel agents, according to Exponent’s website.
Other recent dividend recapitalisations include Luxembourg-based satellite TV business M7, coffee and sandwich chain Pret A Manger and energy analysis group Wood Mackenzie.
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