BBI Group clubs up unitranche deal

The seven-year deal includes a £10 million undrawn acquisition line from lenders Babson, Crescent and EQT.

Three alternative lenders have signed a £60 million ($94 million; €86 million) seven-year loan with BBI Group, a Cardiff-based diagnostics firm, PDI understands.

Babson Capital, Crescent Capital Group and EQT Capital formed a club to back Exponent Private Equity’s purchase of BBI from US-based healthcare firm Alere. 

Of the £60 million financing, £50 million was drawn immediately with the remaining £10 million held in reserve as an acquisition line. Exponent plans to grow the business both organically and through bolt-on purchases.

The seven-year term loan has a unitranche structure with first lien security over the company’s assets. The debt pushes the company’s leverage to roughly 5x based on the lender’s EBITDA calculations, PDI was told. Alere did not fully break out the firm’s numbers in audited accounts. 

Pricing has not been disclosed, but is said to be in the typical unitranche range of 6 to 8 percent. Debt adviser Tomorrow Partners ran the bidding for the mandate and brought the three debt funds into the club. The deal, signed on 2 July, was executed within about four weeks, PDI understands. 

Exponent paid $164 million for BBI, which develops and makes parts for a number of industries, including diagnostics, healthcare, defence and food. 

Mark Wilton, a managing director with Babson Capital, who worked on the transaction, said the deal made a lot of sense from several perspectives. BBI was a non-core business for Alere and restricted from competing with other parts of the wider group for clients, so there is untapped potential growth, Wilton said. BBI’s products cover diagnostic testing done outside a laboratory, pregnancy tests and monitoring for diabetes. The firm has also developed a test for Ebola that produces results outside a laboratory within 20 minutes. 

“BBI do the clever bit, they produce the active ingredient that reacts with the sample which makes their products a key element in the supply chain,” Wilton said, adding that the sector is regulated, making switching supplier difficult. He declined to comment on the terms of the deal. 

Christine Vanden Beukel, managing director and head of Crescent’s European specialty lending strategy, said: “Our European lending strategy continues to meet the growing need for capital among middle-market companies that are constrained by changes in the lending market across the region and sponsors that seek experienced lenders that understand their needs.”

Headquartered in Cardiff, South Wales, BBI has about 470 employees around the world. It was founded in 1986 and listed on AIM in 2004. Alere bought the firm in 2008 before shedding the almost standalone unit this month.