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KWM and Bakers cook up refinance
King & Wood Mallesons and Baker & McKenzie have acted on a US$3.4 billion acquisition and debt refinance.
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Firms: King & Wood Mallesons (Nine joint lead arrangers, including Bank of America and Deutsche Bank); Baker & McKenzie (Australia) and Simpson Thacher & Bartlett LLP (US and UK) (Algeco/Ausco)
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Deal: Algeco Scotman Group’s acquisition and debt refinance
Area: Banking
Value: $US3.4 billion
Key players: The KWM team was led by banking partner Richard Hayes, who was assisted by senior associates Greg Nicholas and Will Stawell (banking), David Anderson (tax) and Stuart Courtney (stamp duty), and associates Herina Lee and Audrey Wang
Deal significance: The acquisition and debt financing included a $US1.25 billion revolving asset-based loan (ABL), one of the largest ABLs to be completed in the Australian market. As part of Algeco’s new long-term capital structure, the financiers provided a US$1.25 billion ABL facility and purchased $US1,075 million aggregate principal amount of 8.5 per cent senior secured notes due 2018, €275 million aggregate principal amount of nine per cent senior secured notes due 2018 and $US745 million aggregate principal amount of 10.75 per cent senior unsecured notes due 2019. Algeco is owned by TDR Capital, a leading UK-based private equity firm. The financing closed on 11 October 2012 and funded Algeco Scotsman’s acquisition of the Australian-based Ausco Modular and NZ-based Portacom businesses. The financing was also provided to the new combined group to refinance existing debt and to provide for the combined group’s ongoing working capital needs. The ABL facility and notes are secured by a security package over the assets of the combined group located in Australia, NZ, the US and various other jurisdictions. Algeco is a leading global business services provider focused on modular space and secure storage solutions providing a comprehensive range of portable temporary and permanent buildings, and its acquisition of Ausco Modular and Portacom, leading providers of modular buildings in Australia and New Zealand, will provide Algeco with a significant market presence in the Asia-Pacific region, substantial exposure to high-growth markets, and expansion of the group’s current geographic footprint. “This deal also provides further evidence of the growing popularity of ABL facilities worldwide, which provide banks with excellent security coverage and borrowers with increased liquidity,” said Hayes.
