Permira refinances Primary's Paperchase

Permira contributed a £32m six-year term loan from its direct lending fund, Permira Credit Solutions II. The vehicle reached a final close on €800m back in July. Lloyds meanwhile provided £18m of capex, revolving credit and ancillary facilities.

Primary Capital didn't reap a dividend as part of the transaction, with the fresh debt instead refinancing existing facilities and funding the company's future expansion, unquote" understands.

The GP bought Paperchase in a £31m MBO in 2010 from now-defunct retailer Borders. In 2014, the company appointed financial advisers to explore a potential sale. Although Paperchase stated at the time that it had received offers from several suitors, a sale never materialised. Paperchase and its owners called the process off earlier this year, having deemed that the bids undervalued the business.

According to several reports, Paperchase's shareholders were eyeing a £150m price tag for the company, which would have been equivalent to 15x EBITDA.

Company
Established in the 1970s, Paperchase produces and sells stationery, greeting cards and gifts. The company operates 122 outlets and 31 concessions in the UK and has a presence in Ireland, the Netherlands, Denmark, France, Germany, Canada, the US and the Middle East. Paperchase also sells its products directly via its website.

The company generated revenues of £128m and EBITDA of £9.6m in the most recent financial year, up 7% and 33% year-on-year respectively.

People
Dan Hatcher represented Permira Debt Managers on the transaction, while Lloyds was represented by Chris Birt.

Advisers
Equity, management – PwC (Debt advisory).

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• Topics
• Restructuring
• UK / Ireland
• Consumer
• Refinancing
• Permira
• Primary Capital