Ares Management and Swedish bank SEB are backing private equity group GMT Communication Partners with a DKK 510 million (€68.3 million; $94.3 million) debt package to refinance Scandinavian information and business intelligence provider, the Karnov Group.
Ares provided financing in the carve out of the TMT-focused business from Thomson Reuters in 2011. In partnership with SEB, the pair trumped a number of other lenders in the refinancing of the group this time.
“The size of the business significantly increased and the nature of the operation changed – it became an independent business,” Francois Stoessel, associate at GMT told Private Debt Investor. “It was an opportunity that was attractive for many other potential lenders.”
The DKK 510 million (€68.3 million; $94.3 million) debt package comprises traditional senior debt provided by SEB, a small portion of second lien debt provided by Ares and an undrawn small repo facility provided by SEB also.
Although undisclosed, the refinancing has ensured more attractive terms for GMT. “When we were supported by Ares in 2011, the debt package typically reflected the operational risk associated with a carve out. Now it’s a standalone business with a different risk profile – a professionalised and growing business – we can get much more attractive terms. Overall the cost of the debt is significantly lower than it was,” Stoessel explained.
Stefan Franssen, partner at GMT Communication Partners, said in a statement: “When we acquired Karnov, it was already well positioned in attractive niche markets of the professional information industry, but also had great potential to use technologies to radically improve its offering to customers. Since then we have worked with management to deliver an ambitious strategic growth plan and are seeing this translate into really strong performance. This refinancing gives the business the platform it now needs to continue this exciting growth story.”
The company is projected to report revenues in excess of DKK 300 million for 2014, mainly generated by its online platform, supported by an accelerating organic growth of 8% versus previous year.
Carl Helander, managing director Nordic Region at Ares Management Ltd., also said in a statement: “We are very pleased to have been involved in Karnov since the acquisition in 2011 and the second lien loan Ares provided demonstrates our flexible approach to financing and ability to work closely with local banks in the Nordic region. We are also delighted to be continuing our involvement with the business, alongside GMT and SEB, and look forward to supporting Karnov in the next exiting phase of its growth. “
The investment in the Karnov Group was made from fund GMT Communications Partners III, which closed at €350m in 2007.
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