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Deals of the year 2010: RBS WorldPay sale to Bain/Advent

The up to £1.9 billion RBS WorldPay leveraged buyout was not only the second-biggest LBO in Europe in 2010 (after Tomkins), but it achieved this by skilfully tapping into the wave of appetite for leveraged loans that had been building throughout the region all year.

RBS WorldPay sale to Bain/Advent
Deal: £2 billion LBO
Date: August 2010
Advisers: UBS (WorldPay), Credit Suisse (Bain/Advent)

The deal itself was required as one of the remedies demanded by the European Commission for the £54 billion of state aid that RBS has received from the UK government. The bank remains a minority (20%) shareholder in the business, which generated operating profits of £249 million in 2009 and is Europe’s largest payments processor. When the deal was announced it attracted strong interest from private equity buyers – which had money to burn as a legacy of their pre-2007 fundraising but were short of quality opportunities in Europe. RBS, which was advised by UBS, received more than 12 bids for the business from a range of buyers including Blackstone, Carlyle, CVC, TPG, Apax and Permira but the business eventually went to Bain Capital and Advent International.

The fact that the deal included a £1.2 billion stapled financing package didn’t hurt, but the £970 million loan financing to back the LBO really marked a turning point for the leveraged finance market in Europe in 2010.