August 29, 2017 / 3:38 PM / a year ago

LPC-VWR's US$7.75bn buyout loan set to launch

LONDON, Aug 29 (Reuters) - A jumbo US$7.75bn-equivalent buyout financing backing US life sciences company Avantor’s take-private of lab supplies company VWR Corp is expected to launch next week, banking sources said.

Underwriting banks Goldman Sachs, Barclays and Jefferies are preparing to launch the deal after Labor Day, having initially considered launching the financing in July but decided to hold off until after the summer.

The US$7.75bn-equivalent financing comprises a US$5bn senior secured first-lien term loan that will include a €1bn tranche; a US$2.25bn senior unsecured bridge facility and a US$500m revolving credit facility.

There is also preferred equity totalling US$2bn of senior debt and US$650m of junior debt.

The euro loan is expected to pay around 350bp, with a 0% floor, the sources said.

Avantor was not immediately available to comment.

“Syndicating €1bn is a sweet spot in Europe as it is large enough to be liquid but not too large that there becomes a strain on liquidity,” a senior banker said.

The loan will be launching alongside a number of other leveraged financings, including a €3bn buyout financing for German generic drugmaker Stada, which is due to be shown to investors at a bank meeting on September 7 in London.

Private equity groups Bain Capital and Cinven secured control of German generic drugmaker Stada in August with a sweetened takeover offer, ending months of uncertainty in the largest acquisition of a listed German company by buyout groups.

Avantor, which is owned by New Mountain Capital, said that it would buy VWR Corp for about US$4.38bn on May 5.

The merger will create a global laboratory equipment giant supplying healthcare and technology industries with everything from beakers to microscopes. (Editing by Christopher Mangham)

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