Ista International GmbH, the German metering company being acquired by CVC Capital Partners, started marketing 1.15 billion euros ($1.5 billion) of loans, according to two people familiar with the transaction.
A lender meeting to help sell the term loan B is due to take place in London on May 3, said the people, who declined to be identified because the deal is private. The term loan B will mature in 2020 and may pay interest of 450 to 475 basis points, or 4.5 to 4.75 percentage points, more than benchmark rates.
The debt is part of about 2.3 billion euros of financing that will also include senior and subordinated bonds, CVC’s legal adviser Kirkland & Ellis said earlier this month in a statement. The ratio of total debt to earnings before interest, taxes, depreciation and amortization may be about 7.25 times while senior leverage may be about 5.5 times, the people said.
Officials at Essen, Germany-based Ista didn’t reply to an e-mail seeking comment on the deal. Phoebe Kebbel, a Frankfurt-based spokeswoman for CVC, declined to comment.
Deutsche Bank AG is coordinating the transaction and Bank of America Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co., Nomura Holdings Inc, UniCredit SpA are joint bookrunners, according to data compiled by Bloomberg.
The company doesn’t plan to include a term loan A, a type of debt usually marketed to banks, in the deal, the people said. Term loan B facilities are typically marketed to institutional investors.
CVC agreed to buy a majority stake in Ista from Charterhouse Capital Partners LLP. CVC’s offer values the company at about 3.1 billion euros including debt. Ista provides electricity, water, heat and gas-meter reading services as well as hardware to property managers, home owners and utilities in 25 countries.