Goldman Sachs, Merrill Lynch and The Royal Bank of Canada have been mandated to underwrite the financing backing the $640 million acquisition of bathroom fixtures maker MAAX by a sponsor group formed by J.W. Childs Associates, Borealis Capital Corp. and OMERS Merchant Banking Group.
Goldman and Merrill will be joint bookrunners on the U.S. dollar-denominated "B" loan and high-yield pieces. RBC is the sole bookrunner on the Canadian dollar-denominated pro rata. All three banks are joint lead arrangers. The mixed currency facility is "designed because we have a company that's both Canadian and U.S. based with revenues in both Canadian and U.S. dollars. We wanted our liabilities to roughly match our Canadian and U.S. dollar-denominated income," said Steven Segal, a partner with J.W. Childs.
"The sponsor groups have relationships with all three institutions," Segal said, explaining the choice of lead banks. The sponsor group won the company through a public auction process, which began in September 2003. "A lot of companies approached us initially, and it resulted in this offer being negotiated on an exclusive basis at the later part of the process," said Denis Aubin, MAAX's executive v.p. and cfo.
The purchase price includes the assumption of MAAX's existing debt. The company currently has C$73 million of debt, according to Aubin. This consists of $45 million of private placement notes and outstanding Canadian dollar-denominated revolver borrowings. National Bank of Canada leads the revolver.
J.W. Childs will be investing through its $1.9 billion JWC Equity Partners III Fund, while Borealis' investment will be made through its C$375 million private equity funds, Borealis Private Equity Limited Partnership and Borealis (QLP) Private Equity Limited Partnership. OMERS Merchant Banking Group is the private equity arm of the C$33 billion Ontario Municipal Employees Retirement Systems. Goldman and Merrill bankers declined comment. RBC bankers, OMERS officials and Borealis officials did not return calls.