LONDON, May 16 (Reuters) - A US$7.75bn-equivalent debt financing backing US life sciences company Avantor’s take-private of lab supplies company VWR Corp will offer at least €1bn to European investors, banking sources said.
Avantor, owned by New Mountain Capital, announced on 5 May it would buy VWR Corp for about US$4.38bn.
Goldman Sachs, Barclays and Jefferies have underwritten the debt and are expected to be joined by a number of other banks on the financing, which comprises a US$5bn senior secured first-lien term loan; a US$2.25bn senior unsecured bridge facility; and a US$500m revolving credit facility.
Around 15%-20% of the financing will be denominated in euros in a move that is expected to please European investors, hungry for new paper.
The financing is expected to be shown to investors in a global road show and syndicated across leveraged loans and high-yield bonds, with the final split dependant on where the demand is and what market provides the most attractive borrowing terms, the sources said.
VWR and Avantor were not immediately available to comment.
Avantor entered into a definitive agreement to acquire VWR for US$33.25 per share in cash, representing an enterprise value of US$6.4bn.
The merger will create a global lab equipment giant supplying everything from beakers to microscopes to the healthcare and technology industries. The deal combines Avantor's strength in manufacturing and its presence in emerging markets with VWR's distribution network in the Americas and Europe, the companies said.
Avantor, formed in August 2010 when New Mountain Capital purchased the business from Covidien Inc, manufactures materials and chemicals for the biopharma industry.
VWR, a company that traces its roots to the California Gold Rush in the 1850s, was bought by Madison Dearborn Partners in 2007 and went public in October 2014. (Editing by Christopher Mangham)