Deals
Cinven Skips Debt Market and Will Buy MBCC Unit With Equity
- Private equity M&A is typically funded by a lot of debt
- Cinven stepped in to buy MBCC assets after Ineos deal dropped
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UK buyout firm Cinven has decided against using borrowed money to purchase a building-materials business, according to people familiar with the matter. It’s an unusual move in the private equity world that in part reflects the turmoil in the banking industry and leveraged-finance markets.
Cinven will use its own money to buy the chemical admixtures operations from Germany’s MBCC Group, said the people, who asked not to be identified because the talks are private. Buyout firms typically use high-yield financing for a significant portion of the purchase price when doing deals, saddling the target with debt but also providing much bigger returns than acquisitions that are financed with equity.