Tikehau in unitranche driving seat for Flexitech

The Paris-based lender has made its first US dollar-denominated loan to support Sun Capital’s buyout of automotive part supplier Flexitech.

The European arm of Sun Capital Partners has arranged a $41 million unitranche loan from Tikehau Investment Management to support its purchase of Flexitech, said a source close to the deal. 

The French-based target has production facilities in five countries and supplies brake hoses as well as design and testing services to carmakers including BMW, Daimler, Ford and Volkswagen. 

The six-year facility pays around 900bps over Libor all-in through a mix of cash and payment-in-kind without warrants. The deal terms include a 50bps Libor floor, said the source. 

The buyout financing brings Flexitech’s leverage to 3.5x. The company has some existing senior secured factoring credit lines in place.

Flexitech was sold via a competitive auction by Mitsubishi Corporation. The sale and related financing have taken almost a year to wrap up, the source said, adding that a number of French sponsors had been looking at the deal. 

Flexitech is based in France, but has operations in Brazil, Mexico, Romania and the US. It has more than 1,200 employees and its client list extends to names like Fiat-Chrysler, General Motors, JLR, Peugeot Citroën and Renault-Nissan. 

New owner Sun European Partners plans to expand the business into Asia and has experience pushing growth into that region, the source noted. 

The financing was Tikehau’s first US dollar-denominated financing and includes a built-in hedge. It is the sixth transaction from Tikehau’s new third direct-lending fund which is in fundraising mode at the moment and expected to close next year. 

Tikehau has more than €5 billion in assets under management through its asset management subsidiary, Tikehau IM, its listed minority equity investment company, Salvepar, and its long-term investment company, Tikehau Capital Partners. The firm has offices in Paris, Brussels, London and Singapore.