Belgian mobile filtration provider Desotec’s debt financing for its acquisition could consist of 8x leveraged senior debt including a 6x unitranche facility and a 2x holdco PIK, sources told Reorg. Alternative structures that combine equity and debt are also being considered, they added.
The first round of bids were submitted March 2. Sponsors Permira, Omers and Astorg are among a group of about ten bidders, sources said. Bidders that make it through to the next round are expected to be decided tomorrow.
The company is
marketed off 2020 EBITDA of €36 million, as well as a run-rate EBITDA of €38 million. However, it is expected that the financing will be based on its 2020 EBITDA of €36 million, sources added. The company could reach a valuation between €576 million to €612 million based on multiples of 16x to 17x and €36 million EBITDA.
Sources noted that the business is capex intensive and that questions remain over its sales efficiency, sources added.
The company’s incumbent lenders Investec is
competing for the current acquisition financing for Desotec, while Pemberton is also keen to maintain its position, as reported.
In August 2017, EQT acquired Desotec through its EQT VII fund from AAC Capital Partners and other minority owners. The company was
valued at about €280 million based on €20 million EBITDA and a multiple of 14x at the time. Pemberton, advised by Ashurst, provided a second lien loan to support the acquisition, supplemented by a senior loan from a consortium of lenders including ING Belgium, KBC Bank, Investec Bank, NIBC Bank and IKB Deutsche Industriebank, according to a
release at the time.
Omers declined to comment, while Permira and Astorg did not respond to Reorg’s request for comment.
--Lucía Camblor, Kerstin Kubanek