Hg Capital-backed team.blue mandates bank for recap deal

Credit Suisse is mandated to arrange a first- and second-lien recapitalization of digital technology group team.blue, in a deal that will bring an up-to-€300 million dividend for sponsor Hg Capital, according to market sources.

The deal is expected to launch as soon as next week, and will move team.blue from the private debt space and into the syndicated market for the first time. Hg first invested in the group in 2019 when it bought Combell from Waterland, going on to merge it with TransIP and Register to create the new group. The combined firm has since further expanded both organically and through acquisition, and now reports EBITDA of close to €150 million. Hg declined to comment when contacted by LCD.

The new loans will refinance all debt and provide for the dividend, taking leverage to 6x through the first lien and 7.5x through the second-lien, market sources say. A further turn of holdco PIK debt is set to come on top of this, and is likely to be pre-placed with a lenders including HPS and GSC, sources add. The new loans will be rated.

Team.blue's existing debt structure largely dates from October 2019 when the firm merged with another Hg portfolio group, Dada, in a deal that increased the firm's existing facilities. This left the group's opco debt split between a €600 million TLB and €115 million in super-senior facilities, for total leverage of roughly 6x (a further €77 million slug of holdco PIK took leverage to 6.7x). HPS and Partners were the initial term loan lenders to the group on buyout, with others including CDPQ and Bridgepoint later joining, sources added. A syndicate of banks provided the super-senior facilities.

Team.blue provides digital presence and enablement tools such as domains, hosting, email, VPS and applications to more than 2 million SME, SoHo and developer customers across Europe.