October 10, 2016 / 9:16 AM / 10 months ago

LPC-Bankers line up 1.4bn of debt for potential BSN sale

LONDON, Oct 10 (Reuters) - Bankers are preparing around 1.4bn of debt financing to back a potential sale of German bandage and plaster cast maker BSN medical, banking sources said on Monday.

Swedish buyout firm EQT, which acquired 69 percent of BSN medical in 2012 for 1.8bn, hired JP Morgan earlier in the year to handle the sale, in a deal expected to be worth more than 2bn.

First round bids are due in the coming days, with final round bids expected five to six weeks later, the banking sources said.

EQT declined to comment and BSN medical was not immediately available to comment.

The sale is attracting a lot of interest from private equity firms and banks are preparing debt financings comprised of leveraged loans and high yield bonds to back potential bids. The financings could tap both the European and US leveraged markets, the sources said.

Some 1.4bn of debt would represent a multiple of around 7.0 times BSN medical's approximate 200m Ebitda, the sources said.

Bankers are eager to underwrite the deal following a lack of event driven financings in 2016.

Hamburg-based BSN Medical was set up in 2001 as a joint venture between Germany's Beiersdorf AG and Britain's Smith & Nephew, as the two companies decided to combine operations in wound care, fracture management, physiotherapy and compression therapy.

EQT's buyout was backed with 865m of loans, split between 391.5m of mezzanine debt and 473.5m of senior loans, denominated in euros and dollars. The loans were repriced twice in October 2012 and August 2013, when the company raised an additional 40m. In May 2015, BSN raised a 380m term loan to pay down the more expensive mezzanine debt, according to Thomson Reuters LPC data. (Editing by Christopher Mangham)

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