LONDON May 3 Bankers are working on debt
financings totalling around £400m to back a potential sale of UK
human resources software company NGA Human Resources as a sale
process kicks off, banking sources said on Wednesday.
Former lenders Goldman Sachs and Park Square took control of
NGA, formerly known as Northgate Information Solutions, from
owner KKR in a debt for equity swap late in 2015, backed with a
£320m leveraged loan financing, according to Thomson Reuters
They have now decided to sell the business, hiring Goldman
Sachs as advisers on the process, which is expected to see first
round bids submitted by the end of May, the sources said.
A bank education process took place yesterday, following a
meeting with lenders some weeks prior, the sources said.
Goldman Sachs, NGA and Park Square were not immediately
available to comment.
Some £400m of debt financing equates to around 5.0 times
Northgate’s approximate £70m Ebitda, the sources said.
Debt is expected to be in the form of either leveraged loans
or high-yield bonds, mainly denominated in sterling, the sources
Bonds might be preferable as a covenant-lite loan could be a
hard sell to investors, due to the company’s chequered past.
High-yield bonds automatically come without maintenance
The business consists of two units, a UK mid-market business
that is performing well and an enterprise business serving
larger corporates, which is more of a turnaround story, sources
The preference will be to sell the company as a whole, but
the sellers may accept bids for the units separately, the
KKR took Northgate private in 2008, in a deal that valued
the company at £593m plus existing debt. KKR subsequently sold
divisions including Northgate Public Services to Cinven for
£320m in December 2014 and the managed services division to
outsourcing group Capita for £65m in 2013 – leaving only NGA
NGA Human Resources helps organizations pioneer digital HR,
master payroll, ensure compliance, unlock workforce data and
deliver best-in-class HR operations, according to its website.
(Editing by Christopher Mangham)