LONDON Jan 24 Bankers are arranging debt
packages of up to $500 million to back private equity firm
Electra's potential sale of electronic animal
identification firm Allflex, banking sources said on Thursday.
Rothschild has been hired to explore a sale or refinancing
of Allflex, which could fetch around $1 billion
Electra bought the company in 1998 and has recapitalised the
business twice, the first in 2005 when it paid itself a $238.6
million dividend and again in 2007 when it took $380 million out
of the company, according to Thomson Reuters LPC data.
Information has been sent to potential buyers of Allflex
which is expected to attract both private equity and trade
Bankers are working on debt packages to back a buyout should
it go to a buyout house. Debt financing is likely to be around
$400-$500 million in senior leveraged loans and mezzanine debt
denominated in dollars and euros.
This would equate to approximately 4-5 times the company's
$100 million earnings before interest, tax, depreciation and
amortization (EBITDA), the banking sources said.
Electra declined to comment.
Bankers are also working on back-up scenarios should a sale
not go through, including refinancing Allflex's existing debt or
options for Electra to conduct another dividend
"As well as acquisition finance, bankers are looking at a
refinancing or recapitalisation of Allflex's debt. It is always
good to have back-up plans in your pocket in case a sale doesn't
go through," one of the bankers said.
The company is a leader in electronic traceability with
factories in France, Brazil, Poland and China.