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 years.
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 debt.
“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 local authority.
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.)