Four Private Equity Firms Make the Cut for Hotly Contested Imes-Icore Auction; Banks and Direct Lenders Running Hard

  Relevant Document: Annual Report 2021 (in German) The sale of dental equipment manufacturer Imes-Icore, one of the most competitive processes in the German mid-market, has moved into the second round admitting IK Investment Partners, EMZ Partners, Nordic Capital and PAI Partners, sources told Reorg. The auction has drawn an equally strong appetite from lenders, with debt funds pitching unitranche at around 5.5x, sources said. Banks, including incumbent lenders, are also touting aggressive leverage through a variety of structures, including 4.75x senior debt as well as a first lien, second lien structure, pushing leverage up to 5.25x, sources said. Given the leverage offered by banks, a unitranche financing is unlikely to be enough to justify the higher debt pricing, sources said. However, depending on who buys the business, a cov-lite unitranche could still be relevant, one source added. Some of the sponsors in the running are known for their aggressive terms, which German banks are unlikely to accept, the same source added. The business is marketed off EBITDA of €15 million in a process run by Houlihan Lokey, as reported. Valuation multiples for the highly contested asset are expected to reach 14x-16x, the sources said. Second round bids are due[...]