The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Gala restructures capital to give money back to sponsors

Private equity houses Candover and Cinven have taken advantage of a favourable market to extract £1.025 billion ($1.915 billion) from UK gaming company Gala. The lending facilities with Merrill Lynch, Royal Bank of Scotland and Intermediate Capital have achieved cheaper funding than the original facilities, arranged as part of an LBO in February 2003.

They have also been reorganised to insert a second lien facility between the senior term loans and the mezzanine facility, a growing trend in recapitalisations that enables the sponsors to increase leverage in an attractive market without breaking any negative pledge clauses with existing lenders.

As a result, not only have Candover and Cinven achieved cheaper funding, they have managed to pay themselves a large dividend with the proceeds. As with many financing structures, it is a valuable example for CFOs set by private equity sponsors.

International law firm Linklaters advised the banks on the deal. Partner Gideon Moore, who led the deal, said: “Like the recapitalisation of Bertelsmann Springer, a second lien facility has been inserted between the senior and mezzanine facilities and reflects a growing trend in the sponsor-backed leveraged finance market.”

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree