Advent International is seeking to refinance debt on its Dutch medical supplier Mediq and pay itself an €80 million dividend in the process, according to a source familiar with the situation.
The private equity firm has hired Deutsche Bank to arrange the transactions, which include the removal of some financial covenants. Advent will use cash on Mediq’s balance sheet to pay the dividend.
Debt of €740 million was used to back Advent’s roughly $1 billion buyout of Mediq in 2013. It subsequently took the listed healthcare company private.
The transaction is the second time Advent has decided to take advantage of the benign interest rate environment. It took a €230 million dividend at the end of last year after raising a new €55 million loan facility and selling its Polish network of pharmacies Mediq Apteka for €70 million, according to reports.
The refinancing will bring the leverage on Mediq up to the level it had when the deal was originated by Advent, from 3.5 times earnings to around 4 times.
It’s understood the firm is looking to reduce interest margins by 50 basis points. Thus the premium on a term loan A, revolving credit and capital expenditure facility will fall from 425 bp to 375bp, and from 450 bp to 400 bp on a term loan B.
Advent International declined to comment.