Credit Suisse First Boston will lead a $400 million debt financing package to back Francisco Partners' acquisition of GE Global eXchange Services (GXS), a business-to-business e-commerce company. A banker said the $800 million acquisition would be funded in part with bank debt and bonds, although the exact mix of each has yet to be decided. The remaining $400 million will be funded with equity provided by Francisco, one of the world's largest technology buyout funds.
A GXS spokesman said the divestiture from General Electric means GXS won't compete with other GE divisions for development, while the acquisition will provide the company with opportunities to acquire other companies and pursue synergies. In a throwback to the late 1990s, he added that equity incentives would be provided to recruit the best talent, as an initial public offering is possible. The acquisition should be completed by October. He referred all questions on the financing to a Francisco spokesman, who did not return calls.
GXS helps businesses improve supply chain management, and bankers did not recall another business-to-business company venturing into the loan market previously. Still, one banker noted that the company's operating profit was $167 million last year and it has a solid base of customers.