Roper Industries has tapped J.P. Morgan, Merrill Lynch and Wachovia Securities for $625 million in bank debt to back the acquisition of Neptune Technology Group from Investcorp for $475 million. Roper is also planning to issue $150-200 million of convertible subordinated notes and $150-200 million of common stock. The new bank lines will refinance existing debt under the company's revolver and $125 million of senior notes.
"It's really soup-to-nuts financing," said a banker. J.P. Morgan and Wachovia are putting in most of the debt financing, but Merrill, Roper's traditional investment banker, is leading the equity financing, said a banker familiar with the situation. Bankers on the deal either declined comment or did not return calls. Investcorp bought Neptune from Schlumberger in 2001. Earlier this year the private equity firm took a dividend in the neighborhood of $120 million through a refinancing led by UBS (LMW, 3/23). The Neptune business is expected to generate $57-60 million in EBITDA in 2003.
Also last week, private equity fund The Jordan Company bought competitor IMS Meters Holdings from Invensys for $650 million, through its Resolute Fund. A banker said the metering business is not purely a water-metering business, like Neptune, but is in a similar space. Credit Suisse First Boston and Goldman Sachs will lead the debt financing for this transaction, he said. The structure of the credit has not yet been decided. Officials at the two banks did not return calls.