Inovie sets final talk on €775M add-on term loan

Final price talk on the €775 million add-on term loan due March 2028 from Inovie Group is out at E+400, with a 0% floor offered at 99-99.25. Final replies were due at noon London time via a group led by physical bookrunners BNP Paribas (left) and Credit Agricole CIB.

Today’s update comes after the firm widened the margin across the ratchet yesterday from an initial starting level of E+375. Talk on the issue price is unchanged from yesterday, suggesting a yield of 4.21%-4.25%.

Following yesterday’s revision the margin ratchet starts at E+400 for secured net leverage greater than 5.1x; E+375 for SNL greater than 4.6x; and E+350 for SNL less than or equal to 4.6x. The margin ratchet holiday has been reset for six months, as has soft call-protection at 101. Existing holders of the term loan also receive a waiver fee of 25 bps.

Portability is limited to a permitted investor for 24 months after the first utilization of the add-on, subject to secured net leverage of less than or equal to 6x and a minimum-35% equity value.

Ratings are affirmed at B/B2/B for both issue and issuer with a 3 recovery rating.

S&P Global Ratings noted the deal will repay €113 million drawn from the borrower’s €175 million revolver and fund a €332 million shareholder dividend. In its update, Moody’s points out the dividend comes less than a year after a buyout but after the group generated free cash flow of around €200 million. Sources add revenue from COVID-19 testing has also been strong through the year and, while this is expected to continue into 2022, there is concern that the company is opting to relever at an EBITDA peak. The deal will also support the group’s acquisition strategy.

Inovie's original loan dates from a €772 million term loan B allocated in December 2020 to back Ardian's acquisition of a stake in the firm. Ardian announced it had agreed to buy a minority stake in the firm in a statement in November 2020 from the group’s shareholder biologists.

Inovie operates multisite laboratories across five regions in France, specializing in fertility, genomics, anatomical pathology and veterinary services. For the nine months ended Sept. 30, the firm reported revenue of more than €800 million and EBITDA of more than €300 million.