| LONDON, July 11
LONDON, July 11 Private equity firm BC Partners
is set to take around 120 million euros ($163.69 million) as a
dividend from its German pharma company Aenova as part of a
wider 730 million euro covenant-lite loan refinancing, banking
sources said on Friday.
BC Partners acquired Aenova in 2012 from Bridgepoint in a
deal that valued the company at around 500 million euros, backed
with 230 million euros of senior loans. It raised a further 57
million euros of loans for its acquisition of pharma company
Temmler Group in 2012 and 130 million euros of loans for its
acquisition of German peer Haupt Pharma last year, according to
Thomson Reuters LPC data.
It has now decided to conduct a dividend recapitalisation -
a process whereby debt in a business is refinanced and increased
in order for shareholders to take a dividend payment.
BC Partners was not immediately available to comment.
Deutsche Bank and JP Morgan are arranging the financing
which is split between a 470 million euro, six-year term loan B
paying an interest margin of 400 basis points over Euribor and a
30 million pound, six-year term loan B paying 450bps over Libor
as well as a 155 million euro, seven-year second lien facility
paying 700bps over Euribor. All tranches have a 1 percent
The TLB is guided with an original issue discount (OID) of
99.5 and the second lien is guided with 99 OID, the banking
There is also a 50 million euro, six-year revolving credit
facility and a 25 million euro six-year acquisition facility
both paying 375bps over Euribor, the banking sources said.
The deal will be shown to investors at a bank meeting in
London on July 15 with commitments due July 29.
The financing will be done on a covenant-lite basis,
removing traditional maintenance covenants that protect
The supply/demand imbalance in Europe's leveraged loan
market has created an excess of liquidity that investors are
eager to put to work. Keen to keep product in the loan market
rather than see borrowers tap the high-yield bond market,
European investors conceded to covenant-lite deals and are now
gaining appetite for second-lien loans, which offer better yield
than tightening first-lien paper.
The dividend recapitalisation will take Aenova's debt to
earnings to around 5.8 times in total from a current level of
Aenova was formed by Bridgepoint through the merger of Swiss
Caps, a maker of soft capsule vitamins, supplements and pharma
products, with Dragenopharm, a German contract manufacturer for
the prescription drugs market. It employs about 2,500 staff. In
2013 Aenova had EBITDA of 90 million euros and is targeting
EBITDA of 110 million in 2014.
($1 = 0.7331 Euros)
(Editing by Christopher Mangham)