LONDON, May 14 (LPC) - Irish software firm ION Investment Group has pulled a US$1.96bn loan for ION Corporates after it dropped plans to combine three software businesses — Openlink, TriplePoint and Wall Street Systems — having met opposition from loan investors, banking sources said.
It comes as private equity firm BC Partners said on Monday it would sell its majority stake in financial media and data firm Acuris, which owns the Mergermarket and Debtwire brands, to ION Investment Group.
ION was hoping to fuel an acquisition drive with cash from a US$250m dividend that it was set to take from ION Corporates, however that dividend was scrapped after failing to garner investor support.
When the dividend was scrapped, the loan refinancing for ION Corporates was reduced to US$1.96bn from US$2.21bn.
However, the US$1.96bn loan is now off the table altogether, with the three companies set to remain separate.
The plan to combine the businesses and refinance the debt could return at a later stage, the sources said.
“They are no longer looking to combine the three businesses. They may revisit in future,” a senior banker said.
UBS was sole lender on the ION Corporates refinancing. The bank is also thought to be sole bookrunner on a financing backing ION’s acquisition of Acuris.
“UBS has done every single deal for ION since the start with no other banks – if UBS is prepared to underwrite 100% of the deal why not. UBS is the only name connected to the Acuris deal for now,” a second senior banker said.
The Acuris financing could be combined with the other three companies at some point or launched on a standalone basis, sources said.
“Management has been as vague as possible to keep options open,” a senior investor said.
ION Corporates pulled the refinancing after a number of changes to pricing and documents, including removing the dividend.
The US$1.96bn loan comprised a US$1.56bn-equivalent seven-year tranche and a US$400m-equivalent four-year tranche.
Pricing on the seven-year tranche increased on the euro tranche to 550bp over Euribor with a 1% floor at 98.5 OID from 500bp, with a 0% floor at 98.5. It still wasn’t enough to win investor support.
Pricing on the dollars remained the same at 550bp over Libor with a 0% floor, at 98.5 OID.
The four-year tranche was guided to pay 425bp over Euribor and 475bp over Libor, with a 1% floor at 99 OID.
In addition to the term loans there was a US$30m revolving credit facility.
“They couldn’t get docs over the line as lenders were asking for more and more changes and management wanted to drop it in the end. The business itself is not that bad but there is too much leverage and too many adjustments. Investors need to believe that the management team can deliver,” a second investor said.
ION deals have struggled of late. In March, Openlink was in the market with a €310m leveraged loan to fund its acquisitions of cloud-based software firms Reval and Aspect. That was scrapped and wrapped into the larger jumbo refinancing. It was underwritten by UBS, sources said.
The €310m TLB financing did not complete before the original commitments deadline of March 22 after investors demanded more information about the acquisitions that the firm could not provide at the time.
A financing for Acuris is set to be aggressive as the buyout is around 20 times leveraged, sources said.
A buyout financing for Acuris could be more successful if it was ringfenced away from ION’s other businesses given it is a well liked company, several sources said.
“There comes a point where people run out of patience. ION Corporates was a deal investors were involved with for 3 to 4 weeks and nothing happened so people won’t be brimming with enthusiasm. I don’t think they won themselves many friends over the past month. However, there is no reason why Acuris can’t be a standalone financing. There could be appetite for Acuris if it is a good deal with fair docs,” the senior investor said. (Editing by Christopher Mangham)