IK Partners refinances Solina debt

Mikkel Stern-Peltz
02 September 2014

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Shortly after buying SFK Food, Solina Group, a French food ingredients business owned by IK Partners, has refinanced its debt.

The refinancing will reduce the total debt service paid by Solina, as well as decrease the cash and PIK interest it pays. Furthermore, the new debt package will allow the group to continue its acquisition strategy.

IK said the debt facilities put in place to enable Solina's acquisitions at the time of IK's initial 2011 investment had been fully drawn over the course of three bolt-ons for the company, including the recent SFK deal, which occurred in late August. The business bought Sfinc, owned by Ardian, in 2012.

Solina's recapitalisation was facilitated through €9m in cash, and a new senior term loan C of €60m. Another €60m of capital for acquisition spending was also made available to the company, through a committed credit line of €40m and a non-committed line of €20m.

The debt facilities were supported by Solina's existing finance providers, which included CA-CIB, BNP Paribas, CA Ille-et-Vilaine, Rabobank, CIC, CIC Ouest, ING, KBC, Natixis, Banque Palatine, SG, Alcentra, Unigrains, Cerea and LFPI. The deal was co-arranged by two lead banks: BNP Paribas and CA-CIB.

Previous funding
IK acquired Solina (then Savena) from Azulis Capital and Céréa Capital in 2011. The transaction was sourced through an auction process and IK was introduced to the deal by Easton Corporate Finance. Equity for the transaction was provided by the IK2007 Fund, which raised €1.7bn at final close in October 2007.

Crédit Agricole and BNP Paribas provided senior debt, while Alcentra, Céréa Mezzanine and LFPI supported the transaction with mezzanine financing, according to unquote" data.

The company has a long history of private equity ownership. Barclays Private Equity and Abénex Capital backed the first management buyout of Savena, then known as Saveur, in 1999. In February 2005, the company was acquired by Quartus through a secondary buyout. A senior debt package to support the SBO was arranged by Banque Sanpaolo, while €5m of mezzanine debt was underwritten by Capzanine, according to unquote" data.

Azulis and Céréa acquired Savena in October 2007. The deal was believed to have been valued in the range of €70-90m and each investor held a 39% stake while management owned 18%. BNP Paribas Développement, Natio Vie and Unigrains also co-invested.

Company
Founded in 1988, Solina designs and produces ingredients for the food industry. The company has four business areas: aromatic ingredients, meat ingredients, dietetic ingredients and food services.

Solina operates four production sites. In 2011, the business had a turnover of around €90m.

People
IK's Dan Soudry, Rémi Buttiaux, Arnaud Bosc, Diki Korniloff, Thibaut Richard and Caroline Le Hen worked on the deal, as did Eric Terre, Bertrand Vaz and Laurent Weber for Solina.

Advisers
Debt – EY, Laurent Majubert, Gabriel Morales, Thibault Mignonac, Fanny Colson, Aurelie Buchinet (Financial due diligence); Latham Watkins, Lionel Dechmann, Xavier Farde (Legal).
Company – Willkie Farr & Gallagher , Paul Lombard, Igor Kukhta (Legal).