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By Claire Ruckin
LONDON, June 8 (Reuters) - Banks are lining up around 350 million pounds ($533.72 million) of debt financing to back the buyout of Motor Fuel Group (MFG) by private equity firm Clayton, Dubilier & Rice (CD&R), banking sources said on Monday.
CD&R and management, agreed to buy MFG for around 500 million pounds from Patron Capital, which had owned the business with management since 2011.
Barclays and BNP Paribas are expected to lead the debt financing backing the buyout and will be joined by around five to six other banks, which will then syndicate the debt to institutional investors, the banking sources said.
Banks expected to join the deal include Goldman Sachs, ING, Societe Generale and RBC, banking sources said.
The debt financing will comprise around 300 million pounds of term loans and undrawn loan facilities, the sources said.
Debt is expected to total just under 5.5 times MFG’s earnings before interest, taxes, depreciation and amortisation (EBITDA) of around 55 million pounds, the sources said.
CD&R declined to comment.
Patron and MFG management grew the company from 48 stations in 2011 to a current total of 373 stations operating under the BP, Shell, Texaco and Jet Brands.
As part of the acquisition, senior adviser to CD&R and former Tesco chief executive Sir Terry Leahy, will join MFG’s board. ($1 = 0.6558 pounds) (Editing by Christopher Mangham and Tessa Walsh)