LONDON US-based website domain name provider GoDaddy’s €1.69bn ($1.81 billion) acquisition of peer Host Europe Group will be backed with $1.907bn of loans, the company said.
The fully committed debt financing from existing lenders will include a US$1.377bn-equivalent incremental term loan, split into a dollar-denominated tranche and a euro-denominated tranche. It is set to pay 275bp-300bp over Euribor/Libor.
There is also a US$530m bridge loan, which will pay 275bp over Euribor. The bridge is expected to be repaid in order for the company to reduce debt in 2017, if it sells part of the business.
GoDaddy said it would explore options for HEG's PlusServer managed hosting business, including a possible sale.
From the €1.69bn total purchase price, €605m will go to the sellers and €1.08bn assumed net debt will be simultaneously refinanced at closing. The transaction is expected to close in the second quarter of 2017.
Barclays is leading a leveraged loan financing to back the deal alongside a number of other banks, expected to include Citigroup, Deutsche Bank and RBC. The loan is due to launch for syndication to investors in January, banking sources said.
GoDaddy, owned by private equity firms KKR and Silver Lake, will buy Host Europe from private equity firm Cinven, which acquired the business in August 2013 for £438m.
(Editing by Christopher Mangham)