LONDON (LPC) - General Electric’s Distributed Power business is set to launch a US$2.2bn-equivalent all-loan financing backing its buyout by Advent after the summer, banking sources said on Wednesday.
The private equity firm has mandated Bank of America Merrill Lynch, BNP Paribas, Citigroup and Jefferies to arrange the deal.
The debt will comprise first and second-lien facilities in both euros and dollars. Other banks are expected to join the deal shortly, the sources said.
The deal backs Advent’s US$3.25bn carve-out of General Electric’s Distributed Power division which was announced in June. The sale is expected to be closed in the fourth quarter.
The business is forecast to have Ebitda of nearly US$290m for 2018, according to Reuters, after posting revenues of US$1.317bn last year.
Ebitda of US$290m would bring nominal leverage for the deal to over seven times that figure.
The division includes the Jenbacher and Waukesha gas engine brands and manufacturing sites in North America and Austria.
General Electric announced a corporate shake-up and divestment strategy after posting weak profits and calls to be broken up.
The three-year plan will see the company exiting about US$20bn in industrial assets. General Electric hopes to book as much as US$10bn of sales proceeds this year.
Editing by Tessa Walsh