KKR & Co. (KKR:US) and Bayside Capital Inc. are leading lenders set to take over Dutch daycare center operator Estro Groep in a restructuring that will leave them with a more than 75 percent stake in the company, according to four people with knowledge of the matter.
Investors holding more than three-quarters of Estro’s 264 million euros ($340.8 million) of term loans have agreed to the proposal, which will write off 70 percent the debt, said the people, who asked not to be identified because the talks are private. Holders of a new senior-ranking 34.5 million-euro so- called pay-in-kind loan underwritten by KKR and Bayside will get a 10 percent stake, and management will have the remaining 15 percent.
The Amersfoort, Netherlands-based company, formerly known as Catalpa NV, was acquired by Providence Equity Partners Inc. in 2010 backed by 280 million euros of debt according to data compiled by Bloomberg. The Dutch government has since reduced childcare spending, affecting the earnings of daycare center operators.
KKR and Bayside, who have become the largest lenders to Estro after buying debt from other holders, can opt for a U.K. legal process known as a scheme of arrangement to force remaining creditors to agree to the deal because more than three-quarters of investors back their bid, the people said. Estro’s loan documents state that the debt is subject to English law.
Jonathan Doorley, a spokesman for Providence, declined to comment. A spokeswoman for KKR and a spokesman for Bayside Capital, a unit of Miami-based H.I.G. Capital LLC, both declined to comment on the deal. Monique Schuman, a spokeswoman for Estro, didn’t respond to an e-mail seeking comment.
The KKR and Bayside arranged senior loan will pay interest at 15 percentage points more than benchmark lending rates.
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