Apax ready to make a loss in Marken sell off

 
Michael Bow
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PRIVATE equity firm Apax is set to sell medical courier company Marken at a huge loss after receiving a number of first round bids for the troubled business.

Apax, which bought the blood and vaccine supply shipping business from Intermediate Capital Group in 2009 for roughly £975m, is selling the firm after finally failing to resolve the business's debt burden after months of negotiations.

The firm is weighing up a number of bids from fellow private equity houses, and is said to be "pleased" with the level of interest in the firm.

However, it is expected the firm will fail to recoup any of the money it ploughed into the business.

Apax put around £600m of its own equity into the company with a further £365m of debt underwritten by Lloyds Banking Group.

Apax breached the terms of its debt in December 2011 due to a deterioration in performance. Lloyds Banking Group was willing to reset the covenants in exchange for around £100m of new equity from Apax. However, Apax was only willing to put around £50m on the table.

After mulling a range of options including a debt for equity deal the firm has accepted defeat and last week closed first round bids for the firm in a sale process led by Morgan Stanley.

A source said: "It's fundamentally a strong and healthy business. It's profitable, it has got a new management team and strategy and it is just trying to sort out the capital structure of the new business."

Marken is a global player in the science supply chain business. It currently has 29 offices around the world. Its London office is based in Chiswick.

A sale of the company would involve an overhaul of the board at Marken, which currently has three board members from Apax.

Marken's parent company, De Facto 1341 Limited, cancelled the appointment of Apax partner and co-head of its healthcare group Khawar Mann as director at the start of June, according to a filing at Companies House.