RLPC-Bankers prepare debt to back sale of French caterer Elior

LONDON Thu Dec 13, 2012 7:54am EST

LONDON Dec 13 (Reuters) - Bankers are preparing debt packages in excess of 2 billion euros ($2.6 billion) to back a buyout of French catering company Elior, banking sources said on Thursday.

Private equity firm Charterhouse Capital Partners decided last month to sell Elior, either in whole or in part, and hired Credit Agricole, HSBC and Rothschild to manage the sales process, banking sources said.

The whole business, which includes a contract and concessions unit, could fetch 3-4 billion euros, but if offers are not attractive then Charterhouse could consider selling just Elior's contracts business, the sources added.

The contracts unit provides catering to businesses, schools and hospitals and accounts for around two-thirds of Elior's overall business. Its concessions business caters for airports, railways and motorways.

Information memorandums are due to be sent out to potential bidders in the coming weeks and an auction process will commence in the first quarter, bankers said.

Elior was acquired for 2.5 billion euros in 2006 and Charterhouse owns 62.3 percent, Elior's co-founder Robert Zolade owns 24.7 percent and Chequers Capital owns 7.8 percent. The remaining 5.2 percent is owned by a number of other investors.

The deal is likely to attract a lot of attention from private equity firms eager to do deals after a dearth of merger and acquisitions in 2012.

"From a private equity standpoint it is a very attractive asset. It is big, highly financeable and has performed well," one of the banking sources said.

Bankers are working on debt packages of more than 2 billion euros to back a buyout of the whole business or around 1.5 billion euros for the contracts unit, the bankers said.

"This is a big deal and it will really test market liquidity," another of the banking sources said.

Due to the large debt size, both the leveraged loan and high yield bond markets are likely to be tapped for liquidity, bankers said.

Charterhouse declined to comment.

($1 = 0.7669 euros) (Reporting by Claire Ruckin; Editing by Mark Potter)

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