Bloomberg News

Terra Firma Said to Raise $880 Million for Four Seasons Buyout

June 11, 2012

Terra Firma Capital Partners Ltd., the U.K. private-equity firm founded by Guy Hands, plans to raise 565 million pounds ($880 million) to fund its acquisition of nursing-home operator Four Seasons Health Care Ltd.

Terra Firma will fund the buyout with 525 million pounds of secured and unsecured bonds and a loan, according to three people with knowledge of the transaction, who declined to be identified because the details are private. The financing is being arranged by Barclays Plc and Goldman Sachs Group Inc.

The buyout firm is issuing 350 million pounds of secured notes due June 2019 through Elli Finance (U.K.) Plc, said the people. The bonds are rated B1 by Moody’s Investors Service, four levels below investment grade, and an equivalent B+ by Standard & Poor’s. The issuer can redeem the securities after three years, said the people.

The 175 million pounds of unsecured bonds are being sold through Elli Investments Ltd. and are rated Caa1 by Moody’s, seven steps below junk, and a level higher at B- by S&P. These notes mature in June 2020 and can be redeemed by the issuer after four years, according to the people.

The 40 million-pound loan, in the form of a revolving- credit facility from which funds may be drawn again once they’ve been repaid, has a six-year lifetime and may be increased by 35 million pounds, the people said. The credit line will pay interest of 400 basis points more than the London interbank offered rate, or Libor.

Philip Walters, a London-based spokesman for Terra Firma, declined to comment.

Terra Firma said on April 30 it would buy Four Seasons for as much as 825 million pounds. The company operates 445 care homes and 61 hospitals and special units in the U.K., the Isle of Man and Jersey and recorded about 100 million pounds of earnings before interest, tax, depreciation and amortization in 2011.

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.


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