Alter Domus Bidders Drop Direct Lending Solution in Favor of TLB + HoldCo PIK as Founder Puts Cap on Cash-Pay Leverage

Reporting: Maryna Irkliyenko, Oscar Laurikka Private equity firms bidding for Luxembourg-based fund administrator Alter Domus have opted to bid with financing packages comprising syndicated bank debt and HoldcoPIK instead of pure direct lending solutions, sources told Reorg. Cinven, H&F and TPG are in the second round of the auction, as reported, and had initially been looking at both unitranche and underwritten solutions, the sources said. However, the company’s founder Dominique Robyns wants to remain invested in the business and has put a cap on cash-pay leverage at 5.75x based on €214 million EBITDA, sources said. This is the same level as the staple offered by sell-side advisor and incumbent lender Goldman Sachs, as reported. Direct lenders were able to offer an additional €300 million in cash-pay debt quantum, and were pushing pricing towards 500 bps over the base rate, the sources said. However, with comparable transactions TMF Group and IQ-EQ recently pricing euro-denominated TLB debt at Euribor +375 bps and E+400 bps, respectively, bidders for Alter Domus have opted to pursue the same route, they added Final bids are due on Friday, Feb. 16, according to the sources. Alter Domus raised a dual-tranche €600 million equivalent term-loan in 2021, as[...]