BlueBay backs Danish clothing MBO

The facility was Silverfleet Capital's first deal with BlueBay as well as its first unitranche financing for a portfolio company.

BlueBay Asset Management has backed the acquisition of Danish retailer Masai Clothing by Silverfleet Capital with a DKK490 million ($73.5 million; €65 million) unitranche facility, a source close to the situation told PDI. Net leverage on the private equity supported management buyout stands at around 3x, the source added. 

The deal is the fourth transaction financed from BlueBay’s second direct lending fund, the source added. The fund reached a first close earlier this year, as reported. The facility is also the first financing that BlueBay has provided to mid-market private equity house Silverfleet, two sources confirmed. A spokesperson for Silverfleet confirmed that it was the first time the private equity sponsor had used a unitranche facility for an acquisition.

The debt package included a roughly €10 million-equivalent revolving credit facility provided by UK bank Lloyds along with the seven-year Danish krona unitranche loan from BlueBay. Gross leverage on the deal is roughly 4x, the source added. The revolver is super senior to the unitranche loan. 

Combining a super senior working capital facility from a bank with senior or unitranche debt from a private debt fund is becoming established practice in European mid-market leveraged transactions, said Ben Davis, a partner with Reed Smith who advised BlueBay on the deal. 

Davis noted that the practice began in the UK and was quickly adopted in the French market. The Masai Clothing deal is more evidence that it is spreading to other parts of Europe, he added. 

Silverfleet has acquired a majority stake in Masai Clothing from the firm’s founders, Hans and Nina Rye, who founded the business 23 years ago. Masai’s management team, which is led by chief executive officer Sune Bjerregaard, has bought a minority interest.

Silverfleet plans to grow the business including expansion into new markets. Masai Clothing is a womenswear retailer focused on the over-50s market. 

“We are very excited about this new investment. Masai has a strong and differentiated brand and we look forward to working with the management team to build on what has already been achieved and to accelerate growth further,” said Silverfleet partner Gareth Whiley, in a statement. 

The Masai acquisition is Silverfleet’s first from its new €850 million fund, Silverfleet Capital II, the statement noted. 

London-based BlueBay Asset Management is in the market with its second direct lending fund, which has a €1 billion target.