April 27, 2017 / 10:34 AM / 4 months ago

LPC-Bankers line up £500m of debt for Safetykleen sale

LONDON, April 27 (Reuters) - Bankers are lining up around £500m of debt to back a potential sale of Safetykleen Europe as five buyout firms make it through to the final round of bidding for the company that provides used oil collection, recycling and parts cleaning services, banking sources said.

Warburg Pincus acquired Safetykleen in 2008 for £565m and hired Goldman Sachs earlier this year on a sale process that could see the company fetch around £640m.

Some £500m of debt financing to back a potential buyer’s bid would equate to around 6.5 times Safetykleen’s approximate £80m Ebitda, the sources said.

Bankers said senior and second-lien leveraged loans denominated in stelring and euros were the most likely form of debt financing.

Apax, Ardian, HgCapital, Montagu and Onex have all made it through to the second round of bidding, which is due to take place on May 24, the sources said.

Apax and Ardian declined to comment, while the rest of the bidders and Warburg Pincus were not immediately available to comment.

The auction process comes at the same time as a number of other sales taking place in Europe as the pipeline for new deals builds up.

Bankers and cash-rich investors to Europe’s leveraged loan market are eagerly waiting to fund these buyout deals, after a lack of event driven financings so far this year.

Safetykleen Europe has 1,500 staff working in 70 locations in Europe, Turkey, Brasil, China and Hong Kong. (Editing by Christopher Mangham)

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