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Banks battle it out to finance US$1.1b Cerba buyout

[LONDON] Banks are battling it out to get a mandate on a US$1.1billion debt financing backing the buyout of European medical laboratory services operator Cerba, banking sources said on Tuesday.

Partners Group and PSP Investments agreed to acquire European medical laboratory services operator Cerba from PAI Partners, the companies announced on Sunday. The acquisition followed an auction process.

During the auction process, JP Morgan and Natixis, alongside BNP Paribas, Credit Agricole and Credit Suisse provided a staple financing package totalling US$1.1billion, made up of senior leveraged loans and both senior secured and subordinated high-yield bonds.

However, not all the staple banks are expected to be included on the final mandate as more banks try to secure a role on the deal, the sources said. "The staple financing was there to provide certainty of funds during the auction process but the staple is now there to be beaten," a senior leveraged finance banker said.

Although the size and structure of the debt financing is expected to remain the same, banks will be competing to offer the most attractive and least restrictive terms to the borrowers as well as the tightest pricing.

Docs have been getting more aggressive in Europe's leveraged loan market as banks and investors compete for paper, following a lack of event-driven financings.

A decision on the final bank line up is expected in the coming days, the sources said.

Cerba and PSP Investments were not immediately available to comment, Partners Group declined to comment.

Cerba employs almost 4,300 people, including 350 biologists and generated revenues of approximately 630m in 2016.


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