French drug-maker borrows €220m for MBO – exclusive

French drug-maker borrows €220m for MBO - exclusive 2016-02-09 Rachel McGovern French pharmaceutical manufacturing firm Delpharm has borrowed €220 million to back a management buyout that sees the company’s senior staff increase their stake from 85 percent to full ownership, said a source clos

French pharmaceutical manufacturing firm Delpharm has borrowed €220 million to back a management buyout that sees the company’s senior staff increase their stake from 85 percent to full ownership, said a source close to the deal.

The financing package comprises a €200 million senior term loan led by BNP Paribas and supported by other French banks and one private debt fund. The remaining €20 million in debt took the form of a payment-in-kind note provided by Tikehau Investment Management. 

The deal leaves Delpharm at between 4x-5x levered, added the source. 

Delpharm’s chief executive and president Sebastian Aguettant holds an 80 percent stake following the buyout. Management became the majority owner in the company in 2007 and upped their stake again in 2011. 

Delpharm buys drug manufacturing plants from large pharmaceutical groups and acts as sub-contractor. The debt refinancing, as well as backing the management’s increased stake, will finance further growth. 

Activa Capital originally invested in the group in April 2004 and exited with the first management buyout in June 2007. In 2006, the pharmaceutical group had turnover of €92 million, which grew to €380 million in 2015 with the acquisition of a plant in Dijon from Sanofi. 

The deal is the eighth transaction executed by Tikehau from its third direct lending fund, which is currently in the market with a €750 million target.