Babson backs Electra-owned audio group

The London-based unit of Massachusetts Mutual Life Insurance Company has co-arranged senior debt financing for two Electra-owned deals this year.

Babson Capital Europe has co-lent on the senior debt package for Electra Partners’ acquisition of DiGiCo, a professional audio equipment manufacturer, alongside Bank of Ireland and HSBC, according to a statement. Terms of the deal were undisclosed.

The deal is the second transaction in just over a month that Babson has made with Electra, which acts on behalf of LSE-listed Electra Private Equity. It also co-financed its purchase of Ogier Fiduciary Services for £180 million in June.

Babson Capital Europe, a unit of Charlotte-headquartered insurer MassMutual, started its direct lending initiative in 2012. It has arranged five senior financings in the first half of 2014, David Hirschmann, managing director at the firm, told Private Debt Investor. In June, Babson co-arranged debt facilities on Electra’s purchase of Ogier, with Electra investing £82 million of equity alongside a “significant” investment from Ogier Fiduciary Services management team. Other lenders included HSBC, Lloyds Banking Group, Royal Bank of Scotland and Alberta Investment Management. Babson also jointly arranged a term B loan only senior debt structure for UK automotive information provider Autodata earlier this year, according to its website.

As part of its illiquid credit business Babson also arranges mezzanine and unitranche financing, alongside its wider fixed income asset management business with €11 billion AUM.

Headquartered in Chessington, Surrey, DiGiCo designs and manufactures mixing equipment for theatre, broadcasting and recording studios. The new business “augments our existing investment in the professional audio sector,” Charles Elkington, investment partner at Electra Partners, said. The deal sees the partial exit of ISIS Equity Partners, which will retain a minority stake in the new deal.

Alex Fortescue, chief investment partner at Electra, said: “The creation of the group has been enabled by our flexible investment strategy, which allowed us to provide all of the financing for the first two acquisitions.”

London-based Electra typically invests in the equity and mezzanine debt part of the capital structure. It bought Calrec for £15 million in March this year, while Allen & Heath was bought for £43 million in June 2013. Both were acquired through a combination of equity and debt, provided by Electra in the first instance, and together with Allen & Heath’s management in the latter.

Fortescue said at the time of the Calrec acquisition: “The ability to invest across the capital structure, in this case funding both the equity and debt instruments, is a great example of Electra's flexible investment mandate being put to work to ensure a swift completion for the vendor and a straightforward structure for the business to capitalise on both organic and acquisitive growth opportunities.”