BC Partners overhauls Aenova financing to attract investors

LONDON, Feb 6 (LPC) - German pharma company Aenova is being overhauled by owner BC Partners, which is placing a new capital structure to strengthen the company and increase investor confidence, banking sources said.

Aenova returned to Europe’s leveraged loan market for the first time in 5.5 years, launching a €440m term loan B on February 3 to refinance some of its existing debt.

In addition to the new term loan, BC Partners is also injecting €100m of new equity into Aenova and has also raised €100m of subordinated, preplaced PIK.

The new debt and equity will refinance all of Aenova’s existing senior and second-lien loans.

Aenova’s performance has fluctuated over the past five years.

It struggled between 2015-2017, and on the back of poor performance its loan traded at a low of 82.8% of face value on Europe’s secondary loan market in February 2016, according to LPC data, when Ebitda fell below €90m.

However, performance improved during 2018-2019, with Ebitda recovering to between €90m-€100m, sources said.

“Aenova has had some meaningful performance issues, which is why the transaction looks the way it does. BC Partners is doing the right thing with a restructure to drive Ebitda growth by addressing manufacturing issues and being more engaged with the salesforce -- all the things they have to do with the business to guarantee a strong future. The fact BC Partners is putting in its own money means they believe in the business,” a senior investor said.

Aenova’s loans recovered in Europe’s secondary loan market and were trading at 99.56 In June 2019 before tumbling to 94.79 on January 31 2020 as investors feared the company was facing maturity issues on its existing six-year debt.

“It was at par for periods of last year but then started to go down because maturity was imminent and a lack of communication on how they’d deal with it made people nervous,” the senior investor said.


Aenova is paying slightly more for its new term loan, with the new five-year TLB guided to pay 525bp over Euribor, with a 0% floor at 99.5 OID. The existing term loan pays 400bp over Euribor with a 1% floor.

“It is a self-healing exercise for lenders meaning it is not ideal but fixes and addresses the maturity issue and therefore makes it a better proposition,” a second senior investor said.

Aenova waited to refinance its debt in order to show a track record of improved performance. It also picked a good time to come to the market, which is extremely strong as technicals tip in favour of borrowers as investors struggle to put money to work amid a lack of new deal flow.

Some work was done behind the scenes prior to launching syndication to secure anchor investors in the deal. With that momentum, a number of new and existing investors are revisiting the borrower. Investors have been asked to commit in the next two weeks.

“There were a run of orders on the deal, people will take time and pay attention to it that haven’t considered in the couple of years. It was a very robust lender meeting where all the initiatives were laid out,” a senior banker said. (Editing by Christopher Mangham)