BPEA EQT seeks financing for Vistra, Tricor merger

Debtwire, AVCJ’s sister title, reported that Tricor is looking to secure a term loan B (TLB) split between US dollar and euro tranches. There may also be Hong Kong dollar tranches. The proceeds will support Tricor’s merger with Vistra, essentially by prepaying Vistra’s existing first-lien TLBs.

BPEA EQT – then known as Baring Private Equity Asia – acquired Vistra in 2015 for USD 1.1bn. The deal was supported by USD 775m in debt financing, according to Debtwire. The first lien portion was subsequently re-priced twice, an add-on facility was introduced to support a bolt-on acquisition, and it was refinanced in 2020 through a USD 1.2bn package comprising US dollar and euro TLBs.

The private equity firm was among the bidders for Tricor when Bank of East Asia sold the asset in 2016 but lost out to Permira. When Permira initiated a sale process in 2021, BPEA EQT moved aggressively, cutting short the second round of bidding by offering to pay 23x earnings and move immediately to a committed term sheet, AVCJ previously reported.

The USD 2.76bn deal was supported by nearly USD 1bn in debt, including a US TLB. A large portion of the deal went to Asian accounts, rather than the typical US-based debt funds. The transaction was agreed upon in late 2021 and the financing closed two weeks before the Ukraine war began.

Three months later, BPEA EQT said it would sell China-based HCP Packaging to The Carlyle Group for around USD 1.1bn. With US banks struggling to syndicate positions that had been underwritten pre-Ukraine, the USD 415m TLB was picked up by lenders in Greater China. This was the first time a US law-governed TLB has been syndicated in its entirety to Asia-headquartered investors.

Sources noted at the time that Tricor and HCP are both stable, cash-flow-generative businesses backed by high-quality sponsors, and the TLBs took out existing Asian bank loans, so due diligence was relatively straightforward.

Speaking to AVCJ earlier this year, Jean-Eric Salata, head of BPEA EQT, noted that the US markets are not closed for Asian buyouts, but they are more expensive and the quantum of debt available was reduced. He said that rising TLB financing costs have nearly doubled the all-in cost.

“Asia is much more open. The cost and availability of financing is about the same and then it’s traditional senior loan-type consortium lending you see among Asian banks,” Salata added. “Some of the larger cross-border deals have become more problematic in this environment. Previously, taking on a USD 10bn transaction was fine. Now you would struggle to get it financed.”

BPEA EQT recently reached a first close on its debut Asia mid-cap fund and completed an investment in Malaysia-headquartered Viewpoint Software. Viewpoint, which describes itself as a leading global entity management specialist, counts a string of major corporate services providers as customers, including Vistra and Tricor.

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• Topics
• Buyouts
• Greater China
• Financing
• Support services
• Hong Kong (China)
• professional services
• Leveraged finance
• M&A
• BPEA EQT