Sub-investment grade corporate credit specialist Alcentra has teamed up with Santander to provide unitranche debt package to private equity group Agilitas Partners in support of its buyout of waste firm Impetus Waste Management (IWM).
The deal is the latest example of debt funds and banks joining forces to provide a financing solution to a sponsor.
Alcentra supplied a term loan while Santander is provided an asset-backed facility as part of the unitranche financing, the size of which was undisclosed.
Zolfo Cooper, advising Agilitas Partners, organised a competitive debt process into which it introduced the two lenders last year.
Jacco Brouwer, a managing director at Zolfo Cooper, said: “The pricing of a unitranche financing is typically more expensive than bank debt, in exchange for higher leverage, similar to a senior plus mezzanine financing, and with slightly more flexible terms.”
Zolfo Cooper approached a couple of banks and looked at a number of their proposals. Separately, it also looked at combined bank and credit fund proposals before deciding that the Alcentra and Santander combination was the best option to support Agilitas’ transformational strategy for the business.
The debt package comprises an acquisition facility, with a further asset finance facility expected to be completed soon. “We are delighted to have secured competitive and bespoke debt facilities for Agilitas which will facilitate Impetus’ transformational change while management is guiding its business away from landfill and into waste-to-energy,” Jacco Brouwer said in a statement.
The deal reflects a wider trend where credit funds are stepping in to provide financing in the absence of bank lending.
However, banks retain an important place in lending as most credit funds won’t provide working capital facilities. “You usually still need a bank for the day-to-day banking needs of the company,” Brouwer said.
Impetus Waste Management (IWM) is a leading waste management and property group in Northeast England. Through acquisitions and organic growth, IWM has transitioned from a pure landfill business to an integrated provider of waste disposal solutions including incineration and recycling. Agilitas Partners, is a pan-European mid-market private equity firm.
This deal follows recent investments by Alcentra in the UK including CorpAcq, Mountain Warehouse, Busy Bees, Cambridge Education and Caffè Nero.