The deal has been launched, and a bank meeting will take place in Vienna on July 15. Russian Alcohol, which manufactures a brand of vodka called Green Mark, is being bought by a consortium made up of Lion Capital, Goldman Sachs European Special Situations Group and Central European Distribution Company, a Polish vodka producer.
It is the second time banks have ventured out with a Russian LBO deal to be syndicated in the international market. The first also backed the buyout of a Russian drinks company, fruit juice producer Nidan Soki.
Goldman Sachs and UniCredit, two of the same banks doing the Russian Alcohol transaction, led the $290m deal backing the buyout of Nidan Soki by Lion Capital last year. But it came to the market at a difficult time for a debut Russian LBO deal — launched in September 2007, it followed in the wake of the collapse of the European leveraged loan market, and struggled to gain traction at first.
Bankers on the Russian Alcohol deal said they were confident, however, that this deal would find immediate support, because of its conservative structure and the high equity contribution to the deal — 78.2% of the transaction is made up of equity funding.
"The debt size is pretty small, and it’s all senior," said one official close to the facility. "In structuring it, we also made sure it reflected current market conditions, especially in the LBO market. There is a limited amount to be syndicated, and we were very aware that it had to tick all the right boxes."
Syndication will be mainly targeted at banks. Bankers did not comment on the deal’s pricing. The total net cash-pay leverage is 2.49 times Ebitda.
The loan for Nidan Soki was more highly leveraged, with senior debt at about 4.5 times Ebitda and total debt at 5.75 times, and it also included a mezzanine tranche and payment-in-kind loans. |
