September 4, 2017 / 10:55 AM / 22 days ago

LPC-Stada’s giant €2.35bn buyout loan launches

LONDON, Sept 4 (Reuters) - A €2.35bn jumbo loan financing backing private equity groups Bain Capital and Cinven’s buyout of German generic drugmaker Stada has launched to Europe’s leveraged loan market, banking sources said on Monday.

Bain and Cinven last month won the majority of Stada shares with a sweetened €5.24bn bid, offering €66.25 per share in the largest private-equity funded takeover of a German listed company.

Barclays, Nomura and UBS are leading the leveraged loan financing as physical bookrunners, alongside joint bookrunners Citi, Commerzbank, Jefferies, JP Morgan and Societe Generale.

Deutsche Bank and ING also joined as joint bookrunners prior to launch, as did BNP Paribas, LBBW, MUFG as mandated lead arrangers.

A few other banks are also expected to join the financing, the sources said.

The financing comprises a €1.65bn first-lien term loan and a €300-equivalent, sterling-denominated first-lien term loan. Both have a seven-year maturity and are offered with 101 soft-call for six months.

There is also a €400m six-year revolving credit facility, guided to pay 325bp over Euribor/Libor with a 0% floor.

The financing will be shown to investors at a bank meeting on September 7, when full pricing will emerge. Both term loans are offered with a 0% floor.

Investors have been asked to commit to the loans by September 21.

The buyout will also be backed with €485m of seven-year senior secured fixed rate bonds and €340m of eight-year senior unsecured fixed rate notes that are expected to launch shortly, the sources said.

This is the first jumbo loan out of the blocks post-summer and is expected to garner a lot of attention from banks and investors eager to do the deal and put a meaningful amount of new money to work.

Around €1bn of term loans that form part of a wider US$7.75bn-equivalent buyout financing backing US life sciences company Avantor’s take-private of lab supplies company VWR Corp are also expected to launch imminently, sources said.

Stada’s financing launched on Monday shortly after the buyout firms said they will offer minority Stada shareholders a marked-up €74.40 per share to get full control of Stada, giving in to pressure from hold-out investor Elliott Management. (Editing by Christopher Mangham)

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