Wed 09/27/2023 02:53 AM
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Sell-side advisor Lazard has received high leverage pitches from direct lenders and banks to refinance the existing debt of French insurance broker Finaxy, sources told Reorg.

The refinancing, which will include a portability feature, could go down the unitranche or bank financing route. The latter comprises 5.5x senior debt and a turn of PIK, while unitranche packages would see a similar structure with 6.5x leverage through 5.5x unitranche and a turn of PIK, the sources said.

Debt packages pitched are structured off €24 million of EBITDA, the sources noted.

The portability feature includes the option to reset the company’s leverage back to the level initially arranged by the lenders in the event of a sale. That way, if the company deleverages between the time of refinancing and the time it is sold, the new buyer will have the option to use the 6.5x leverage targeted as part of the refinancing, the sources said.

Finaxy is raising a new debt package to fund an acquisition as well as prepare the insurance broker for a subsequent sale, the sources added. The company has exhausted the debt package provided to back the acquisition by Ardian in 2020. It currently has 3.5x turns of leverage of senior debt from Credit Agricole, Banque Populaire, BNP Paribas, CIC and a PIK portion from CIC Private Debt, sources said.

Insurance brokers have been popular targets with private equity buyers in France. The sale of Kereis is ongoing, while IK is preparing to launch the sale of its French financial technology business Eres by the end of the year. Bridgepoint, Cinven, Hg, PAI Partners and TA Associates are among potential bidders for Eres, as reported by Reorg.

Ardian bought Finaxy from Equistone Partners in 2020, as reported. The secondary buyout was valued at about €160 million, or 15x EBITDA.

Founded in 2009 by Erick Berville, the insurance broker consists of the three divisions - corporate, consumer and solutions.

Ardian declined to comment. Lazard did not reply to Reorg’s request for comment at the time of the publication.

-- Maryna Irkliyenko, Lucía Camblor
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