KKR in fourth deal for direct lending fund

TowerBrook LBO is KKR’s fourth investment from its new European direct lending strategy.

Investment firm KKR has made its fourth deal for its maiden direct lending fund, providing debt in the unitranche financing of TowerBrook’s buyout of Dutch food supplier Van Geloven, a source with knowledge of the situation said. The firm is seeking €1.5 billion for its first European direct lending fund, the strategy of which is to invest in disintermediated senior and unitranche loans in good but overlooked companies, PDI understands.

Alternative lender ICG, which is in the process of closing its second direct lending fund on €3 billion, provided 80 percent of the TowerBrook unitranche financing. Investec Bank, the third mandated lead arranger on the transaction, is also a lender while Rabobank is providing a super-senior revolving credit facility, according to statements from TowerBrook and ICG. Financial details were undisclosed.

The lenders have agreed with the borrower that the facility can be increased in the future as part of a buy-and-build strategy for the company.

ICG and TowerBrook declined to comment beyond the statements. KKR also declined to comment.

Tilburg-based Van Geloven produces frozen convenience snacks and foods, supplying a range of traditional Benelux snacks and international foods. Van Geloven generated sales of €195.4 million in 2014, PDI sister title Private Equity International reported. TowerBrook bought the business from Lion Capital and Dutch private equity house Avedon Capital Partners.

Van Geloven will pursue a consolidation strategy, alongside international expansion, in what is a fragmented market across Europe, according to statements.

KKR is also in the process of raising its second special situations fund targeting around $3 billion and other US direct lending funds. In February, Nat Zilkha and Alan Burke were named co-heads of credit investment strategies at the firm, with Zilkha based in New York and Burke in Dublin. Zilkha is also co-head of the firm’s special situations strategy. Both report to Scott Nuttall, head of global capital and asset management.