Europe’s AXA Private Equity has arranged a €220m unitranche facility for the acquisition of IPH by French private equity firm PAI Partners, from Investcorp. The deal represents the largest unitranche financing in Europe to date.
IPH is a distributor of industrial supplies in Europe. Founded in 1987 and historically based in Lyon, France, IPH is active in France, Belgium, the Netherlands, Germany and Romania. It has approximately 3,000 employees and revenues of approx. €900m in 2011.
The deal generated in excess of €210m of realisation proceeds for Investcorp, the firm said. Since Investcorp’s investment in 2006, IPH tripled its sales from €293m to €860m and grew EBITDA from €12m to over €62m in 2012.
Olivier Berment, co-head of private debt and managing director at AXA Private Equity, said, “Providing this financing gives IPH the opportunity to pursue its consolidation strategy and take the next steps forward on its growth path. Unitranche financing has become an important way for companies to finance future investments and enhance value creation. With credit remaining scarce and banks reluctant to lend, we can expect the use of unitranche financing for acquisitions to increase throughout the year.”
AXA has invested more than €700m in unitranche financing since 2011, in deals including The Flexitallic Group, Unither Pharmaceuticals and Kermel.
By blending the entire debt financing into one single tranche through combining the senior and subordinated debt, companies have greater access to the necessary resources to finance their investment projects, providing them with a viable alternative to traditional bank financing.
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