In another positive sign for the loan market, UBS Warburg will be leading a debt financing package for the private equity firms Whitney & Co. and Golden Gate Capital backing the $685 million acquisition of Herbalife. The company is a weight management and nutritional supplement provider. Some market observers believe sponsor activity is picking up as financing is becoming more readily available and private equity firms need to put to work their nascent piles of cash. Details of the debt financing are still being determined, another banker noted. UBS bankers declined comment on the transaction.
The deal will probably not be highly leveraged, said one banker, who noted the company is not asset-intensive. But across the board leverage multiples have been incrementally increasing, he added. Another banker disagreed the market is reviving however. "The financing opportunities may be there, but buyers and sellers still disagree on valuations. We've held our breath before and nothing has come," he cautioned. Herbalife officials based in Los Angeles could not be reached for comment by press time.