Onex, Canada Pension Plan Seek $1.6 Billion Buyout Loan for Tomkins Deal

Canada Pension Plan Investment Board and Onex Corp., the nation’s biggest buyout firm, plan to raise $1.6 billion of leveraged loans as part of a debt package to fund their buyout of Tomkins Plc, according to two people familiar with the situation.

Lenders are invited to a meeting tomorrow in New York for the six-year $1 billion of term loan B portion of the deal, said the people, who declined to be identified because the terms are private. The rest of the financing consists of a $300 million term loan A and a $300 million revolving credit line, both maturing in five years, one of the people said.

A term loan A is sold primarily to banks, while so-called B loans are mainly bought by non-bank lenders such as collateralized loan obligations, mutual funds and hedge funds. James Devas, a spokesman in London for Canada Pension and Onex, declined to comment on details of the financing.

Bank of America Merrill Lynch, Citigroup Inc., Barclays Capital, RBC Capital Markets and UBS AG arranged and underwrote $3 billion of debt to back the acquisition, according to a statement on July 27.

Toronto-based Onex and Canada Pension said in July they agreed to buy the London-based maker of auto parts and building materials for 2.89 billion pounds ($4.4 billion).

Onex and Canada Pension Plan will each contribute $1.1 billion from their own resources, according to the statement. Onex will fund its portion from Onex Partners III LP private equity fund. Canada Pension Plan, the country’s second-biggest retirement fund, will use existing cash.

Tomkins said on Aug. 31 that 90 percent of voting shareholders approved its takeover by Canada Pension and Onex.

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email