LONDON Bankers are working on debt financings of up to €780m (666 million pounds) to back a potential sale of jewellery retailer Thom Europe, banking sources said.
Thom, which is majority owned by private equity firm Bridgepoint alongside France-based Apax, hired Rothschild and Goldman Sachs for a dual-track sale or IPO process last year, valuing the company at around €1bn.
An exit via a sale is the current focus and the company is attracting a lot of attention from potential buyers, which are due to bid in the first round of an auction process on February 20, the sources said.
Bankers are working on debt financings equating to around 4.0-5.0 times Thom’s approximate €130m Ebitda. This would account for up to €650m of drawn debt, expected to be in form of leveraged loans and around €130m of undrawn facilities, the sources said.
Leverage is likely to remain around this level, rather than pushing into the 5.0-6.0 times context, contrary to what many large leveraged buyouts are doing of late, given the company is in the retail sector, the sources said.
The company - which operates in the market for affordable, rather than luxury goods - is expected to draw interest from other private equity funds, who could take over from Bridgepoint and Apax and help drive expansion across Europe. It could also appeal to Asian investors.
Bridgepoint declined to comment. Apax was not immediately available to comment and Thom's other backers, Altamir (ALMP.PA) and Qualium Investissement, were also not immediately available to comment.
Created from the 2010 merger of French chains Histoire d'Or and Marc Orian, Thom Europe purchased Italy's Stroili and Germany's Oro Vivo last year.
(Editing by Christopher Mangham)