Bain Capital ropes in investment banks to help fuel €650m deal

Michael Bow
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BAIN Capital, the private equity group, will tap the high yield bond markets to help fund a €650m (£555m) deal to take over the French version of Ikea, underscoring a recent pickup in debt financing for European buyouts.

Bain, co-founded by ex-US Presidential hopeful Mitt Romney, yesterday said it is in exclusive talks to buy French home decoration chain Maison du Monde from rival private equity houses Apax Partners, LBO France and Nixen.

The company has lined up Credit Suisse, Commerzbank and Natixis to underwrite a high yield issue in the debt markets to help fund the deal, giving the deal four times leverage.

Equity from both Bain and current management at Maisons du Monde has also been committed to fund the deal. It is the second time in as many months Bain has accessed high yield bonds, after using the instrument to fund the buy of German clutch maker FTE last month.

Apax and LBO France joined forces in 2007 to take 35 per cent each in Maisons du Monde, after taking control in 2007 with a €435m stake. Management owned 20 per cent and Nixen owned a minority stake.

Maisons du Monde, founded in 2006 by chief executive Xavier Marie, has seen revenues double since the buyout, rising from €230m to €500m for the year ending 2012.

The move towards more debt funding follows a landmark deal by BC Partners on Wednesday to buy publisher Springer Science+Business Media.

BC Partners raised €2.5bn of so-called covenant lite loans – loans which are underwritten without covenants – from a consortium of banks to fund the deal, the biggest raising of such debt since 2008.