ICG welcomes Swiss hotel schools with SFr170m

Eurazeo has tapped ICG to support its 100% acquisition of two Swiss hospitality schools.

London-based ICG is putting up a SFr170 million ($172 million; €155 million) unitranche financing package to back listed French investment firm Eurazeo’s acquisition of two Swiss hospitality schools. 

Eurazeo is paying SFr380 million for Glion Institute of Higher Education and Les Roches International School of Hotel Management. The firm will write a SFr220 million equity cheque with ICG lending the balance for the leveraged buyout. 

The seven-year SFr170 million pays a margin of around 700bps and leaves the newly combined group around 5x levered, said a source close to the deal. 

A representative of Eurazeo was unavailable for comment on the financing ahead of publication. 

The financing is the latest example of the trend for debt funds doing larger ticket deals in Europe. Eurazeo’s last acquisition, the €330 million buyout of Irish-based VAT tax refund business Fintrax, was financed by a €300 million debt package underwritten by Ares. The debt fund syndicated a €50 million revolver to banks while putting up the full €250 million unitranche loan itself. 

Glion has around 2,000 students with operations in Switzerland and the UK. Les Roches has campuses in Switzerland, Spain, Jordan, China and is about to open another in the US. 

Combined revenues for the two schools in 2015 were SFr173 million with SFr28 million in pro-forma EBITDA, according to an investor presentation by Eurazeo. Taken together, the schools have produced a compound annual growth rate of 5.9 percent since 2013.

“Eurazeo has long considered education an appealing sector, supported by positive long-term trends, and playing a critical role in our societies,” said Virginie Morgon, deputy chief executive of Eurazeo.

“We are delighted today to partner with Glion and Les Roches, and look forward to working with their respective management teams to create a promising standalone group, providing both schools with the necessary resources to further build on their brand equity worldwide, their rich heritage and the strength of their students and alumni communities.”

Eurazeo will set up a new core business for the combined group, relocating the headquarters within Europe. The schools will be combined under the Glion brand and given access to Eurazeo’s human and financial resources. 

ICG closed its second private debt fund on €3 billion in the middle of last year.