LONDON Nov 7 Advent international is to take around a 230-million-euro ($311.13 million) dividend out of its Dutch medical supplier Mediq after selling its Polish business, banking sources said on Thursday.
Advent took Mediq private at the start of the year backed with a 740-million euro leveraged loan financing.
Advent agreed to sell Mediq's Polish business to Penta Investments in August for around 100 million euros and will use the proceeds of the sale along with cash on Mediq's balance sheet and a new 55 million euro loan facility to pay itself a dividend, the banking sources said.
At the same time, Mediq will reprice its 740 million euro buyout financing to pay 50 bps less after strong performance.
Mediq will now pay an interest margin of 425 bps over Euribor instead of 475 bps on it term loan A, revolving credit facility and capital expenditure facility. Its term loan B will now charge 450 bps over Euribor from 500 bps, the banking sources added.
"Advent is taking out around half of the equity in Mediq, but it had a big equity cheque in it from day one. The business has also performed well, deleveraged and created more equity through the sale of its Polish business which is why investors feel okay about the deal," one of the said.
"Having said that, they are doing a dividend and a pricing reduction request at the same time, which is a bit unusual, but it shows the strength of the market that a sponsor can do this."
Debt advisory firm Marlborough Partners is advising on the deal and a bank meeting is due on Friday in Amsterdam to showcase it to investors.
Advent and Marlborough Partners declined to comment.
Demand for leveraged loans has far outweighed supply this year due to a lack of M&A which means institutional investors are eager to put cash to work and are reluctant to be repaid.
The new 55 million euro loan facility has already seen strong demand from existing investors in Mediq, sources said.
The deal will increase Mediq's leverage to 4 times its earnings, the sources said, taking it back up to the level when Advent bought the business. The current level is around 2.4 times, the sources said.