Reuters: Mergers News: UPDATE 1-RLPC-Bankers prep $2.7 bln debt for Iglo buyout-sources

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UPDATE 1-RLPC-Bankers prep $2.7 bln debt for Iglo buyout-sources Mar 27th 2012, 16:12 Tue Mar 27, 2012 12:12pm EDT By Claire Ruckin LONDON, March 27 (Reuters) - Bankers are gearing up to arrange a 2 billion euro ($2.7 billion) debt package to finance a buyout of Iglo, maker of Birds Eye fish fingers, after it emerged private equity group Permira is considering the sale of its frozen food group, banking sources said on Tuesday. The sale of Iglo is expected to fetch around 3 billion euros, the largest western European buyout since industrial group Tomkins' 3.6 billion euro acquisition in July 2010 by a Canadian consortium, according to Thomson Reuters data. "This is a hefty deal and there are not many which could be done at this size, but it is a well known credit which has performed relatively well and it's attracting interest," a banker said. Permira bought Iglo from Unilever in 2006 for 1.73 billion euros, backed by around 1.5 billion euros of leveraged loans, and later bought the remaining part of Unilever's European frozen food business, Findus Italy, in 2010 for 805 million, backed by 500 million of leveraged loans, according to Thomson Reuters LPC data. The company's leverage was around 6.5 times. Debt has since been reduced to around 1.4 billion euros as of the end of 2011, with leverage of around 4.3 times, banking sources said. Permira has looked to exit Iglo and concluded it would fetch more via a sale than a float. Iglo has attracted interest from private equity firms including Blackstone, BC Partners and Cinven. Credit Suisse has been appointed as sell-side adviser. Bankers are eager to arrange a debt package for the buyout which is likely to be around 2 billion euros or around 6 times the company's leverage, banking sources said. That would be a relatively large debt package in the current climate as banks take a more cautious approach to lending, so both the high-yield bond market and U.S. liquidity could to be tapped in order to fund the deal, the banking sources added. "A large amount of lenders in the existing syndicate will roll into a new deal as the credit is well liked and around 1 billion euros could be raised in the loan market, but additional firepower will be needed to get it up to the 2 billion euros mark," a banker said. "Every option will need to be explored, the bank and fund market, U.S. and European liquidity and the high-yield market too." Link this Share this Digg this Email Reprints

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