Fri 10/06/2023 07:58 AM
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Annual Report 2021 (in German)

The sale of dental equipment manufacturer Imes-Icore, one of the most competitive processes in the German mid-market, has moved into the second round admitting IK Investment Partners, EMZ Partners, Nordic Capital and PAI Partners, sources told Reorg.

The auction has drawn an equally strong appetite from lenders, with debt funds pitching unitranche at around 5.5x, sources said. Banks, including incumbent lenders, are also touting aggressive leverage through a variety of structures, including 4.75x senior debt as well as a first lien, second lien structure, pushing leverage up to 5.25x, sources said.

Given the leverage offered by banks, a unitranche financing is unlikely to be enough to justify the higher debt pricing, sources said. However, depending on who buys the business, a cov-lite unitranche could still be relevant, one source added. Some of the sponsors in the running are known for their aggressive terms, which German banks are unlikely to accept, the same source added.

The business is marketed off EBITDA of €15 million in a process run by Houlihan Lokey, as reported. Valuation multiples for the highly contested asset are expected to reach 14x-16x, the sources said.

Second round bids are due the second week of November. Bidders IK, EMZ, Nordic Capital and PAI are due to meet management in the coming weeks, the sources said.

Ardian acquired Imes-Icore from its founders in 2017. The sponsor financed the buyout with a bank club deal comprising Commerzbank, SEB and UniCredit at around 4.75x, as reported. It was then refinanced by the same group of lenders in 2022 at around 4x its €10 million 2022 EBITDA, as reported.

Founded in 2002 by Hugo Isert and Christoph Stark, Imes-Icore develops, produces and sells specialist CNC-CAD/CAM systems for the dental industry, according to its website. The business is headquartered in Eiterfeld, Germany.

EMZ, Houlihan Lokey, IK Investment Partners, Nordic Capital and PAI declined to comment. Ardian did not respond to a request for comment.

– Oscar Laurikka
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