As first reported on Loan Market Week's Web site, Bain Capital is said to be buying dollar-store company Dollarama and has tapped Citigroup to lead the financing. The credit facility comprises a C$75 million revolver, C$120 million "A" loan and a U.S. dollar denominated term loan of around $200 million, one loan investor said. Bain is buying the Montreal-based company at a 10 times multiple, said a potential lender, though the purchase price could not be determined. A Bain spokesman, Citigroup bankers and George Makhoul, Dollarama's controller, did not return calls.
The credit went out to investors at LIBOR plus 2 1/2%, buysiders noted. "There is good cash flow and a lot of equity and sub debt below us in the capital structure," one buysider said. "You wouldn't think so by the sound of it, but it's a surprisingly stable and profitable company," another loan investor noted. While the purchase multiple was high at 10 times, comparable public companies in the same line of business trade at roughly 10 times or higher, an investor added.