Blackstone has led a $300m private credit financing package backing Arlington Capital Partners’ take-private acquisition of UK aerospace and defence components manufacturer Gooch & Housego, according to Private Equity Wire. The report said the financing was covered by Bloomberg.
Financing structure and participants
The financing comprises a unitranche loan, a delayed-draw term loan, and a revolving credit facility, according to Private Equity Wire. Blackstone is providing the majority of the capital, the report said. JPMorgan Chase and Jefferies also participated in the financing package, according to the same report.
Arlington initially funded the acquisition entirely with equity before introducing the debt package, according to Private Equity Wire.
Private credit use in leveraged buyouts
The transaction was described as highlighting continued demand for private credit financing in leveraged buyouts, with sponsors favouring direct lenders for execution certainty and pricing despite competition from the broadly syndicated loan market, according to Private Equity Wire. Direct lenders have also supported other UK take-private transactions, including the acquisitions of JTC and Hargreaves Lansdown, the report said.
UK public-to-private environment
The financing comes amid heightened private equity interest in UK-listed companies, which continue to trade at discounted valuations relative to US peers, according to Private Equity Wire. The report said takeover activity in the UK is on course for its busiest year in more than a decade.
Aerospace and defence businesses have attracted particular interest, with Apollo Global Management acquiring EasyJet earlier this year and Arcline exploring a takeover of aerospace supplier Senior, according to Private Equity Wire.
Advisers
JPMorgan advised Arlington on the Gooch & Housego acquisition, with Kirkland & Ellis providing legal counsel, according to Private Equity Wire. Rothschild & Co and Investec advised Gooch & Housego, while Burges Salmon served as legal adviser, the report said.
