UK mid-market pipeline fills

With the majority of the market still on their Christmas break last week, European high-yield got off to a very quiet start to the year. However, the mid-market looks set to be a key focus for those still able to book assets for the first part of the year, with the UK active across the holiday period.

Apax Partners and the Guardian Media Group (GMG) have mandated HSBC, GE, Lloyds TSB and RBS to support their joint acquisition of the business-to-business assets of Emap.

Emap shareholders will receive 470p a share or £1.26bn for the assets. The bid came just two weeks after Emap said it would seek to keep the division, already having agreed to sell its consumer magazines and radio divisions to H Bauer, a German publisher.

Once the deal was announced, Emap’s shares rallied as investors speculated about a possible bid. This led GMG and Apax to buy a near-20% stake in the group to deter rival bidders in late December.

Apax and GMG intend to merge the assets, which include titles such as Broadcast, Drapers and Retail Week, with Incisive Media, Apax’s existing publishing group.

The deal brings Emap’s 60-year existence as an independent company to an end.

KKR has mandated Barclays and HSBC to arrange the debt supporting its buyout of Northgate Information Solutions, the UK human resources software provider. The deal values Northgate’s equity at £593m, with debt giving the group an enterprise value of more than £1bn.

The acquisition follows Northgate’s €228.4m acquisition of a 60.43% stake in Arinso International, a Belgian human resources technology group, which was funded through a £500m loan. Just prior to KKR’s acquisition, both Numis Securities and Morgan Stanley had cautioned that the group’s debt pile meant it was close to banking covenants.

ABN AMRO, Barclays, Lloyds TSB and RBS arranged the earlier loan, which closed at the end of July last year.

KKR’s offer price of 95p per Northgate share is a premium of 60.3% to the price of 59.25p per share on 11 December, the day before Northgate announced that it had received an approach.

A €120m holdco PIK facility, mandated to Morgan Stanley, which “substantially” reduced the equity contribution of 3i in its takeover of Global Garden Products, has closed after being placed with a small club of institutional investors and mezzanine funds. The holdco PIK was raised after 3i bought Global Garden and did not require the approval of existing senior and second lien bank lenders.

Euromedic has completed the first stage of its €365m refinancing package through initial MLAs ING and Unicredit. The facility increases Euromedic’s debt to fund the dialysis group’s expansion plans.

Joining as MLAs are Raiffeisen Bank Hungary, Bank of Ireland and MKB. General syndication is now expected early this year.

Senior debt is split between a €60m seven-year term loan A, a €85m eight-year term loan B, a €85m nine-year term loan C, a €75m acquisition/capex facility and a €20m revolver. In addition there is a €40m 10-year mezzanine loan that has been pre-placed.

The loan backing the secondary buyout of Gruppo Argenta has been mandated to UniCredit. The sponsors are Cognetas and Investitori Associati, with Gruppo De Agostini as a co-investor. The vending machine operator is being sold by Advent International.

General syndication of the SFr196m in senior facilities backing the LBO of Maillefer Extrusion by Alpha and management, which have been jointly funded by Mediobanca and Nordea, is to launch in January.

The facility, of which SFr25m in mezzanine has been pre-placed, was initially underwritten by Mediobanca, with Nordea joining as MLA and sub-underwriter.

Senior debt is split between a SFr50m seven-year term loan A paying 225bp over Euribor, a SFr40m eight-year term loan B paying 275bp, a SFr31m nine-year term loan C at 325bp and a SFr75m seven-year revolver paying 225bp.

Maillefer Extrusion, which is a Swiss engineering company, anticipates net sales of SFr254.5m and an Ebitda of SFr31.6m for financial year-end 2007. It is being sold by Argos Soditic.

ING, Landsbanki and Rabobank International as MLAs have completed syndication of the €230m senior debt package supporting Gilde’s buyout of Swets & Zeitlinger, a subscription services company.

The facility is split between a €30m seven-year term loan A paying 225bp over Euribor, a €42.5m eight-year term loan B at 275bp, a €42.5m nine-year term loan C at 325bp and a €115m seven-year revolver paying 225bp. Senior leverage is 3.7x rising to 4.4x total debt.