June 22, 2017 / 11:27 AM / 2 months ago

LPC-JVH put up for sale after securing €330m financing

LONDON, June 22 (Reuters) - Private equity firm Waterland has put Dutch gaming firm JVH up for sale after securing a €330m loan financing that can stay in place for any new owners, banking sources said.

Waterland acquired JVH in 2006 from ABN Amro and NPM Capital, but lost the company to lenders in 2008 after JVH struggled with tax changes. Waterland re-acquired JVH in the same year having invested additional equity to clear its debt, according to Thomson Reuters LPC.

It has now put the company on the block, hiring JP Morgan and Moelis as sellside advisers, the sources said.

Information memorandums were sent out in the last week as potential buyers gear up for an auction process, the sources said.

Waterland and Moelis were not immediately available to comment. JP Morgan declined to comment.

JVH recently completed a debt financing with Ares, which provided a €240m unitranche financing and a €70m acquisition facility. ING provided a €20m super senior revolving credit facility. The loan refinanced existing debt and paid a small dividend to owners, the sources said.

In an unusual move -- one seen more frequently in the high yield bond market -- the loan comes with portability, guaranteeing any potential buyer that the existing capital structure can remain in place in the event of a sale, the sources said.

Typically a change of ownership triggers a loan repayment.

Security of capital can be very attractive for potential buyers. Despite paying up for direct lenders, the big attraction is the flexibility offered compared to the cheaper syndicated loan market.

Ares is able to support JVH’s buy-and-build strategy, with the capacity to increase the total amount of debt in the company to as much as €500m-€600m, the sources said.

JVH is expected to be paying around 6.5%-7%, higher than they would be paying if they tapped the syndicated loan market, but at the lower end of the unitranche market given leverage on the company is below 5 times, the sources said. (Editing by Christopher Mangham)

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