True Potential sets terms, increases size for £700M 2-part buyout bond

True Potential LLP's two-part offering of five-year secured bonds has been launched as £400 million of sterling notes at 6.5% and €360 million of euro bonds at 5%. The final size reflects an upsize to £700 million-equivalent from £675 million, while the bonds land in line with initial price thoughts given this morning at the 6.5% area on the sterling notes and 5% area on the euros.

Books closed at 3:30 p.m. London time today, for pricing thereafter via sole physical bookrunner Credit Suisse (B&D). The bonds back Cinven's acquisition of a majority stake in the company, which was agreed upon in 2021 from an enterprise value of roughly £2.4 billion.

The transaction will include a £100 million revolving credit facility as a £1.8 billion sponsor equity contribution. The additional £25 million from the upsize is set to repay revolver debt.

Corporate and issue ratings are confirmed at B/B1 on positive and stable outlooks, respectively. Kane Bidco is the issuer.

True Potential is a financial services firm that provides advice, investment platform and fund services to retail investors in the U.K. Cinven agreed to buy a majority stake in the Newcastle-based firm for an undisclosed amount in September 2021.

In their ratings assessments, agencies highlight the firm's integrated model that combines an in-house-built platform and an advice services offering that has led to high client and asset retention. The firm also reported strong growth in assets under management from £6 billion in 2018 to an expected AUM of more than £20 billion by the end of 2020. At the time of the acquisition agreement, the firm was expected to generate EBITDA of roughly £135 million for the year ended December 2021.

The transaction translates into net leverage of 3.88x based on adjusted EBITDA of £160 million for the 12 months ending September 2021. UBS, Goldman Sachs, Barclays, Lloyds and NatWest Markets make up the rest of the bookrunning group.

True Potential was founded in 2007. The company employs 350 people and works with more than 800 restricted advisers.