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Changing group owners, his funding target moved

Raising funds as a private equity-owned enterprise, at a high financial leverage, is a process with its special features. In front of the live audience at Treasury 360° Copenhagen, Stark Group’s Kasper Christensen shared his experience of sourcing a syndicated institutional loan.

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Stark Group is a business-to-business distributor of heavy building materials for the construction industry in the Nordics and Germany – and Kasper Christensen its head of treasury. The group changed ownership earlier this year, getting private equity fund under CVC Capital Partners as its new owner. A decision was made to raise debt of 1.3 billion euro – plus a revolving credit facility of 200 million euro to cater for seasonal shifts and small-scale acquisitions.

“As a private equity-owned company, we don’t like maintenance covenants that limit our ability to take on more debt and to do mergers and acquisitions, so that was a clear focus area for us. Also, it’s important when you do deals like this. A lot of the loan documentation is done between lawyers without involving the company too much so it’s important that there is a focus on the particular needs for the company.”

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Kasper Christensen mentions an example.

“We have a large real estate portfolio that we like to work with every now and then and it’s important that the loan documentation allows for flexibility to do that.”

On the other hand, assets to secure the loan needed to be committed (which was not a big challenge in the case). The speed and ease of execution were among the other important parameters.


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