LONDON, June 11 (IFR) - PAI Partners is looking to finance
its acquisition of French nursing homes provider DomusVi with a
high-yield bond, according to market sources, with Goldman Sachs
and Deutsche Bank understood to be leading the deal.
PAI announced on Tuesday that it had entered into exclusive
discussions to acquire DomusVi, which would see the private
equity firm take a majority stake alongside founder Yves Journel
and the company's management team.
PAI is no stranger to the high-yield market, raising a
payment-in-kind bond to back its acquisition of R&R Ice Cream
last year, for example. Market sources also expect a bond
financing for R&R's recently announced acquisition of
Australia's Peters Food Group.
While the care home market is growing across Europe, one
banker said this would be the first French business to raise
bond financing. High-yield investors know the sector primarily
through the UK market, which has seen a slew of deals in recent
Bridgepoint raised a £250m bond to acquire Care UK in 2010,
and the following year Advent raised a larger £600m bond backing
its buyout of the Priory Group. Voyage Care, owned by HgCapital,
priced a £272m high-yield bond package in 2013 to refinance LBO
"The French model is very different from the UK model," said
a banker close to the deal, however.
"It's not as reliant on public funding, and is more of a
private pay market."
In France, while the state covers the costs of medical care,
patients have to pay for their accommodation costs in care
homes. UK care providers are predominantly private, but in
contrast most patients have their costs fully covered by their
DomusVi was formed by the merger of DomusVi and Dolcéa in
January 2011, and considers itself to be the third leading
private group in France for providing homes and services to
elderly people. The company posted its annual results last
month, recording a more than 18% increase in Ebitda to 59.9m.
PAI Partners declined to comment.
(Reporting by Robert Smith and Claire Ruckin. Editing by Helene
Durand and Julian Baker.)