Deals of the Year 2011: Crest Nicholson
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Deals of the Year 2011: Crest Nicholson

Crest Nicholson
Size £509 million refinancing and debt-for-equity swap
Date September 2011
Financial adviser Lazard
return to the Global Deals of the Year index

The troubles faced by Europe’s banking sector in 2011 will inevitably translate into increased corporate distress in 2012  and there is a pressing need for banks to deal with many assets sitting on their balance sheets. Minneapolis-based distressed debt fund Värde’s takeover of UK house builder Crest Nicholson last year could be a sign of things to come. Crest Nicholson, which was taken private in 2007 when it was bought by HBOS and West Coast Capital, had already completed a debt restructuring in 2009 but still had £509 million ($799 million) of debt on the balance sheet. It had a debt to ebitda ratio of 10.2 times and net debt to ebitda of 8.2 times. The firm was symptomatic of what is likely to be a growing trend over the next couple of years – sticking-plaster restructurings that prove insufficient as the global downturn persists.

The UK firm’s debt was held by a bank-dominated syndicate when the US fund, advised by Lazard, decided to build a blocking minority position.

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