June 20, 2013 / 4:44 PM / 4 years ago

Bankers prepare 500 million pound debt to back Domestic & General sale

LONDON (Reuters) - Bankers are putting together around 500 million pounds ($773.23 million) of debt financing to back a potential sale of British home appliance insurer Domestic and General, financial sources said on Thursday.

A handful of private equity firms including Blackstone (BX.N), CVC CVC.UL, Clayton Dubilier & Rice and Stone Point Capital are through to the second round of bidding in an auction process with bids due in July, added the sources, who are bankers working on the financing.

Domestic & General’s private equity owner Advent International hired Goldman Sachs (GS.N) earlier this year to sell the company, which could fetch around 1 billion pounds.

Advent and the potential buyers declined to comment or were not immediately available to comment on Thursday.

Bankers are arranging debt packages worth about 6 times Domestic & General’s approximately 85 million pounds earnings before interest, taxes, depreciation and amortization (EBITDA).

A mixture of leveraged loans, high yield bonds and mezzanine financing are all being considered for the debt package which will mostly be denominated in sterling but could also include some euros and dollars, bankers said.

    Leveraged bankers and investors are particularly keen for the sale to take place given a lack of M&A activity in Europe so far this year.

    Advent International took Domestic & General private for 524 million pounds in 2007 backed with 434 million pounds of debt, according to Thomson Reuters LPC data.

    Domestic & General, which provides extended warranty protection for domestic appliances, has operations in 11 countries, employs around 2500 staff and services15 million customers. Its turnover was 570 million pounds in 2012, according to its website.

    Editing by Sophie Walker

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