CeramTec offers price talk on €1.43B term loan backing buyout

Price talk on the €1.43 billion term loan B backing BC Partners and CPPIB’s joint investment in CeramTec GmbH is out at E+400-425 with a 0% floor offered at 99.5 following a lender call earlier today. BofA Securities is leading a group of joint bookrunners, and replies are now due by noon U.K. time on Jan. 19.

Guidance suggests a yield of 4.15%-4.41%. Ratings have so far emerged from Moody’s at B3 (issuer) and B2 (issue). S&P Global Ratings is expected to follow at B for both issue and issuer, banks say. Morgan Stanley, Nomura, MUFG, Deutsche Bank and UBS make up the joint bookrunner group.

A €515 million unsecured bond offering is also expected to back the deal, with a €250 million revolver rounding out the debt. CTEC III GmbH is the borrowing entity on the loans.

CPPIB said it had agreed to buy a 50% stake in CeramTec in August 2021, leaving the high-performance ceramics group jointly owned with BC Partners. BC European Capital X and co-investors sold the stake with BCP now holding its share through BC Partners Fund XI. Previous shareholders PSP Investments and Ontario Teachers exited their investment as part of the deal, with CPP Investments investing €800 million of equity, according to a statement.

BC Partners led the buyout of CeramTec in 2017 in a deal backed by a €970 million, E+300 term loan B, a $175 million L+325 (0% floor) TLB and €406 million of 5.25% senior notes due 2025. The company was last seen in December 2020 when it allocated a €175 million fungible add-on priced according to a ratchet at E+250 with a 0% floor offered at 97.

CeramTec is a medical technology platform and provider of high-performance ceramics for medical implants and other industrial uses. It has 21 production sites and more than 3,500 employees across 11 countries.