CVC Said to Tap Europe Loan Demand to Fund Campbell Unit LBO
CVC Capital Partners Ltd. is taking advantage of increasing investor demand for European leveraged loans to fund its bid for the European businesses of Campbell Soup Co. (CPB), the world’s largest soup maker.
The private-equity firm plans to finance its purchase with 320-million euros ($429.4 million) in loans, according to a person with knowledge of the matter, who asked not to be identified because the deal is private. Prices of senior-ranking loans have risen about 2 percent this year, according to the Standard & Poor’s European Leveraged Loan Index.
Issuance of speculative-grade loans in Western Europe, that are used to finance buyouts, is at $131 billion this year, more than the $92 billion raised in all of 2012, according to data compiled by Bloomberg. CVC, one of Europe’s biggest private-equity firms, has announced three acquisitions since Aug. 12.
“There is a lot of pent-up demand for leveraged loans in Europe since buyout firms have increasingly turned to high-yield bonds,” Michael Guy, London-based money manager at Tenax Credit Opportunities Fund, said in a telephone interview. This has left “investors chasing limited number of loan deals”, he said.
Ed Moore, a spokesman for CVC employed by Brunswick Group, declined to comment on the debt financing. BNP Paribas Fortis, ING Groep NV, and Rabobank International are arranging the loans, Bloomberg data show.
Campbell Europe, based in Puurs, Belgium, generated about 400 million euros of net sales in 2012 financial year, and owns brands primarily in soups, sauces, and bouillons such as Devos Lemmens, Royco, Liebig, Deli Soup, and Lacroix, CVC said in a statement.
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