RLPC-Bankers prepare debt for sale of British Bonhams

LONDON, June 4 Wed Jun 4, 2014 9:28am EDT

LONDON, June 4 (Reuters) - Bankers are preparing debt financing packages of up to 200 million pounds ($334.78 million) to back a potential sale of British auction house Bonhams, banking sources said on Wednesday.

Bonhams' owners, former motor racing driver Robert Brooks and Dutchman Evert Louwman, have put the company up for sale and first round bids in an auction process are due Friday, the banking sources said.

The deal is likely to attract significant interest from private equity firms eager to do deals and put cash to work, following a dearth of M&A so far this year. Buyout houses including the likes of Bridgepoint and Bain have been pinpointed as potential buyers, the banking sources said.

Bonhams and Bain were not immediately available to comment. Bridgepoint declined to comment.

Bankers are working on debt financing packages of around 150 to 200 million pounds including undrawn facilities or around 5 times Bonhams' earnings before interest, taxes, depreciation and amortisation (EBITDA) of approximately 30 million pounds, the banking sources said.

Debt is expected to be in the form of leveraged loans. A unitranche facility or a small underwrite is being considered, the banking sources said.

Established in 1793, Bonhams operates out of salerooms in London, New York, San Francisco, Hong Kong and Los Angeles. Key items sold last year include a German and Swiss Grand Prix Winning 1954 Mercedes-Benz Formula 1 car for 19.6 million pounds. Bonhams also achieved record sums for a painting in a Russian sale attracting a 7.9 million pound bid.

Profits more than doubled in 2013 to 25 million pounds while revenues grew by almost a fifth to 127.1 million pounds, according to Bonhams' website. ($1 = 0.5974 British Pounds) (Editing by Christopher Mangham)

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