Ares Management has underwritten a €300 million financing package for listed French investment firm Eurazeo for the purchase of a 90 percent stake in Fintrax. Ireland-based Fintrax is a provider of tax-free shopping and dynamic currency conversion services.
Eurazeo is paying €300 million upfront based on an enterprise value of €550 million, with up to €35 million more to be paid depending on 2016 performance. The deal is expected to close before the end of the year.
The €300 million financing package is split between a €250 million unitranche loan and €50 million of undrawn lines. The undrawn portion is divided between some revolving credit and a portion of acquisition financing. Ares arranged and underwrote the whole deal before bringing in a bank lender to provide the undrawn credit, PDI understands.
The unitranche loan pays a margin of around 750bps, said a source close to the deal. The facility is one of, if not the largest, bilateral financing by a debt fund in Europe, added the source.
The €250 million drawn facility puts the company’s net leverage at around 5.75x, PDI understands.
A spokesman for Ares declined to comment.
Galway-headquartered Fintrax owns Premier Tax Free, the second largest tax-free shopping (TFS) provider in the world. The firm enables travellers to reclaim value-added tax paid while abroad. Fintrax also provides currency services to allow tourists to pay for goods and services in their own currency while abroad.
Eurazeo purchased the 90 percent stake from private equity house Exponent which invested in Fintrax in 2012, investing €160 million. The deal gives the exiting firm a 4x money multiple on its investment, according to a statement by Exponent.
Fintrax management hold the remaining 10 percent stake.
The business has been growing fast on the back of a rapidly expanding TFS market which recorded a compound annual growth rate of over 25 percent between 2009 and 2014. It operates in 30 countries across 150,000 points of sale with around €5 billion of eligible sales annually. Its client-base is concentrated on high-end retail brands including Chanel, Gucci, Printemps, Michael Kors and Ralph Lauren.
Fintrax has increased revenues by more than 20 percent a year and EBITDA by more than 31 percent a year since 2011, Eurazeo said in a statement. In July, it recorded €198 million in revenues over the last 12 months.
Eurazeo’s plan to grow the firm further includes expanding into new countries both organically and through acquisitions, targeting regions where the firm has a lower market share and by growing the smaller currency division.
Eurazeo has a diversified portfolio of over €5 billion in assets. The firm is listed and has an institutional and family shareholder base, with a financial structure free of structural debt. The firm sells itself as having a flexible investment horizon that allows it to support its portfolio companies over the long term.