January 24, 2017 / 3:38 PM / a year ago

LPC-Banks line up approx 630m debt for Allfunds sale

LONDON, Jan 24 (Reuters) - Banks have committed up to 630m of debt financing to back a potential sale of Allfunds Bank mutual fund platform owned by Santander Asset Management and Intesa Sanpaolo as interested buyers get shortlisted, banking sources said.

Santander Asset Management and Intesa, which own 50% each of the Madrid-based firm, have decided to sell their shares, hiring Bank of America Merrill Lynch and Morgan Stanley to advise on the process, which is being carried out as a competitive auction, the sources said.

BAML and Morgan Stanley have provided a staple financing totalling around 630m, which equates to roughly 5.5x Allfunds’ approximate 115m Ebitda, the sources said.

The staple financing is made up of an all-senior high-yield bond financing.

Private equity firms Bain Capital and Advent, Hellman & Friedman as well as Permira are thought to have made it through to the second round of the bidding process, alongside China’s Legend Holding, after first round bids were submitted on January 13, the sources said.

Bain and Advent have often teamed up over the years to secure joint control of several European financial services and payment firms, most recently Concardis. Prior tie-ups resulted in the acquisitions of Worldpay and Nets, which both listed on European stock markets, as well as Italy’s Istituto Centrale delle Banche Popolari (ICBPI).

“The staple financing is similar to the ICBPI debt financing,” one of the sources said.

Private equity firms Bain Capital and Permira and SAM declined to comment. Advent, Hellman & Friedman, Legend Holding, Allfunds Bank, Grupo Santander and Intesa were not immediately available to comment.

Mid-sized asset managers appeal to private equity investors as they generate stable returns and offer scope for growth over a three- to five-year period.

Established in 2000 to provide access to open architecture investment funds market, Allfunds has more than 200bn of assets under management.

It offers more than 47,000 funds and has an extensive network of more than 503 clients including commercial and private banks, fund managers and insurers. (Editing by Christopher Mangham)

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