Seqens sets final terms on €830M buyout loan

Final terms on the €830 million term loan B backing the SK Capital-led buyout of SEQENS SAS are confirmed at E+450 with a 0% floor, offered at 99.5. The deal has also seen some document changes including amendments to the ticking-fee schedule and margin ratchet. Recommitments were due by 11 a.m. London time today, via a group led by physical bookrunners J.P. Morgan and Societe Generale CIB.

Final pricing gives a yield of 4.67%, and compares with guidance given at launch of E+425-450 with a 0% floor offered at 99.5. The deal was presented on a call on Oct. 7, and comes with six months of soft call protection at 101. Deutsche Bank and Royal Bank of Canada are non-physical bookrunners.

Among the document changes, the ticking fee now starts at 50% of the margin from day 46, moving to the full margin after 91 days. Previously it had started at 50% of the margin from day 61, moving to the full margin after 121 days.

The margin ratchet has been amended to two step-downs of 25 basis points for each 0.5x reduction in secured net leverage from 4.65x. Previously there were three step-downs of 25 bps for each 0.5x reduction in the secured net leverage ratio.

Ratings are confirmed at B/B2 for both issue and issuer with a 3 recovery rating. The borrower name is Sirona Bidco.

SK Capital announced that it was in exclusive negotiations to acquire Seqens, formerly known as Novacap, from Eurazeo in July. Novacap is an existing borrower that was last seen in July 2017 when it allocated a €225 million term loan add-on due June 2023 at E+350. That deal came alongside a repricing of the group's €435 million term loan.

As part of the deal, SK Capital plans to merge Seqens with its portfolio firm Wavelength Pharmaceuticals, with the aim of creating a leader in the active pharmaceuticals ingredients, or API, and contract development and manufacturing organization business. SK Capital also plans to carve out and dispose of Seqens' Mineral Specialties business.

The buyout financing includes a €130 million revolver, and the sponsor is rolling over roughly €80 million in existing debt.

Seqens, headquartered in France, provides a portfolio of APIs and intermediates as well as custom development and manufacturing services for the pharmaceutical industry. Wavelength Pharmaceuticals was founded in Israel in 1987, and is a developer and manufacturer of APIs.