CD&R's Acquisition of Sanofi's (SNY.US) Subsidiary Supported by 22 Banks
AInvestWednesday, Oct 16, 2024 10:30 pm ET
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Private equity giant Clayton Dubilier & Rice (CD&R) is set to buy a stake in Sanofi's (SNY.US) consumer health unit Opella for about 15 billion euros ($16.4 billion), with 22 banks including Goldman and Citigroup providing financing for the deal, according to reports. Lenders are expected to sign off on the financing in the coming days, providing 8.65 billion euros ($9.4 billion) in euro and dollar loans and bond financing, according to people familiar with the matter. Seven banks including Barclays, BNP Paribas, Citigroup, Goldman, Morgan Stanley and Societe Generale are expected to serve as global coordinators, the people said. The Federal Reserve's first rate cut in four years has raised hopes that borrowing costs are finally falling, and banks are eager to re-enter the leveraged buyout market, one of the most lucrative areas of finance. The Opella deal is one of the largest European deals this year. The financing frenzy has led to hopes that fees will be cut. Global coordinators often play a dominant role in selling bonds to institutional investors and are entitled to higher fees. Four of the seven banks are expected to handle the euro term loans, with the other global coordinators handling the rest of the bonds separately, the people said. Earlier reports said banks had signed up to finance a 4.5 billion euros B-class term loan, with pricing targets of 350 basis points over Euribor for the euro portion and 325 basis points over SOFR for the dollar portion. There is also a 2 billion euros bridge financing for high yield bonds, with a cap of 7.5% for the euro bonds and 8.5% for the dollar bonds. Banks will also provide a 1.2 billion euros revolving credit facility.

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