LPC-Bain’s NGA UK buy backed with £300m leveraged loan

LONDON, Oct 11 (Reuters) - Banks have lined up around £300m of leveraged loans to back private equity firm Bain Capital’s acquisition of the UK divisions of human resources software company NGA Human Resources, banking sources said.

Bain agreed to acquire the UK mid-market business from NGA Human Resources for an undisclosed amount, it was announced on October 9.

Credit Suisse and Morgan Stanley are leading the debt financing, alongside Deutsche Bank, Lloyds and RBC, the sources said.

Some £300m of debt financing comprises an all senior leveraged loan as well as undrawn facilities, the sources said.

The loan is expected to launch for syndication to investors in November, the sources added.

Bain Capital declined to comment.

Goldman Sachs and Park Square took control of NGA, formerly known as Northgate Information Solutions, from owner KKR in a debt for equity swap late in 2015, backed with a £320m leveraged loan financing, according to Thomson Reuters LPC.

That sterling term loan paid 575bp over Libor with a 1% floor. At the time of syndication, half of the loan was pre-placed with lead banks Goldman Sachs, Bank of Ireland and Credit Agricole and the rest was sold to funds.

Goldman Sachs and Park Square put the whole business up for sale earlier this year and the preference at that time was to sell the company as a whole, both the UK mid-market business that was performing well and the enterprise business serving larger corporates, which was more of a turnaround story.

“The UK division is the jewel in the crown,” one of the sources said.

KKR took Northgate private in 2008, in a deal that valued the company at £593m plus existing debt. KKR subsequently sold divisions including Northgate Public Services to Cinven for £320m in December 2014 and the managed services division to outsourcing group Capita for £65m in 2013 – leaving only NGA Human Resources.

NGA Human Resources’ clients include Britain’s police and emergency services and government departments. (Editing by Christopher Mangham)