LONDON, Oct 11 (Reuters) - Five banks have prepped €1.6bn of debt financing to back buyout group BC Partners’ acquisition of German industrial ceramics group Ceramtec, banking sources said.
BC Partners agreed to buy Ceramtec from peer investor Cinven for an undisclosed amount, the buyout firms announced on Wednesday. The Canadian pension funds Public Sector Pension Investment Board and Ontario Teachers’ Pension Plan are co-investors, taking a stake in Ceramtec too.
Bank of America Merrill Lynch and Morgan Stanley are leading the underwritten debt financing, alongside Deutsche Bank, Nomura and UBS, the sources said.
The financing equates to around 7.0 times Ceramtec’s €196m Ebitda, banking sources said.
BC Partners declined to comment.
Leverage on the credit could have been pushed higher if it weren’t for the regulatory restraints imposed on the US banks from the Leveraged Lending Guidelines, sources said.
The all-euro financing comprises a €1.1bn senior term loan; around €400m of subordinated high yield bonds; and around €100m of undrawn facilities, the sources said.
The financing is set to launch for syndication to investors in November, the sources added.
Ceramtec is a maker of technical ceramics used in products ranging from artificial hips and circuit boards to bearings and faucets.
Cinven bought Ceramtec for €1.5bn in 2013 and unsuccessfully tried to list the company in 2015.
Cinven strengthened the group with the acquisitions of US-based peer DAI Ceramics in 2015 and a British electro-ceramics business from Morgan Advanced Materials this year, before launching the sale in September.
Editing by Christopher Mangham