Charterhouse Capital Partners LLP - Entry into new financing arrangements

Charterhouse Capital Partners LLP (Charterhouse) announces that, in connection with the financing of the recommended cash acquisition by Tiger Acquisitions UK Limited (Bidco) of the entire issued and to be issued share capital of Tarsus Group plc (Tarsus), Bidco and Tiger Acquisitions Holding Limited (Midco) have yesterday entered into a senior facilities agreement (as defined as the Bidco Senior Facilities Agreement in the Scheme Document (defined
below)) and certain ancillary documents related thereto (together, the New Finance Documents) with the lenders named as original lenders therein, Global Loan Agency Services Limited as facility agent (the Facility Agent) and GLAS Trust Corporation Limited as security agent (the Security Agent).

 

The New Finance Documents replace and supersede the existing interim facilities agreement entered into between Bidco and certain funds advised and/or managed by the Merchant Banking Division of Goldman Sachs named therein as original interim lenders (the Interim Facilities Agreement) and are on the terms as described in the Scheme Document.

 
Under the Bidco Senior Facilities Agreement, the Lenders (as defined in the Bidco Senior Facilities Agreement) will make available: (a) a unitranche facility of £325,000,000 (the Unitranche Facility); (b) an acquisition facility of £75,000,000 (the Acquisition Facility and together with the Unitranche Facility, the Term Facilities); and (c) a super priority revolving facility (the SPRF) of £25,000,000. The Term Facilities will be redenominated into: (i) in the case of the Unitranche Facility, 70% US Dollar and 30% Euro; and (ii) in the case of Acquisition Facility, into 100% US Dollar, in each case, in accordance with the relevant rate in certain agreed deal contingent swaps (under which the relevant US Dollar and Euro net proceeds of the Unitranche Facility are to be swapped into pounds sterling).

 
The Unitranche Facility will be provided on certain funds basis by certain funds advised and/or managed by the Merchant Banking Division of Goldman Sachs (the Term Lenders), who also make available the Acquisition Facility. The SPRF will be provided by The Governor and Company of the Bank of Ireland (the SPRF Lender). The Unitranche Facility and (where necessary) the SPRF will be available to be drawn for the Acquisition.

 
Under the Bidco Senior Facilities Agreement, the maturity of: (a) the Term Facilities is the date falling seven years after the first drawdown of the Unitranche Facility (the Closing Date); and (b) the SPRF is the date falling 78 months after the Closing Date. The funds under the Bidco Senior Facilities Agreement will be available: (i) for the Unitranche Facility, for the same certain funds period as applicable for the Facility (as defined in the Scheme Document) under the Interim Facilities Agreement which is described in the Scheme Document; (ii) for the Acquisition Facility, until 36 months after the Closing Date; and (iii) for the SPRF, until one month before its maturity date.

 

The margin on the Term Facilities will bear interest at a rate of LIBOR or EURIBOR (as applicable) plus 5.00% per annum, and will be subject to a margin ratchet with three step downs whereby the margin decreases by 0.25% at each step down for each 0.5x reduction in the senior secured net leverage ratio of 6.0x. The margin on the SPRF will bear interest at a rate of LIBOR or EURIBOR (as applicable) plus 2.75% per annum, and will be subject to a margin ratchet with four step downs whereby the margin decreases by 0.25% at each step down for each 0.5x reduction in the senior secured net leverage ratio of 6.0x.

 
Fee details agreed between: (a) the Term Lenders and Bidco are set out in the existing Closing Payments Letter (as defined in the Bidco Senior Facilities Agreement); (b) the SPRF Lender and Midco are set out in a SPRF fee letter; and (c) the Facility Agent, the Security Agent and Midco are set out in a replacement agency fee letter. Ticking fees may also be payable under the Bidco Senior Facilities Agreement on the same terms as set out in the Interim Facilities Agreement, which are described in the Scheme Document.

 
Bidco and Midco have agreed that each of them will enter into an English law debenture and grant security over their assets (including over shares owned by Midco in Bidco, intra-Group receivables owed to Midco by Bidco and material bank accounts of Midco and Bidco) (the Debenture).

 

Under the Bidco Senior Facilities Agreement, the acquisition undertaking by Bidco to not amend or waive any material term or condition of the Rule 2.7 Announcement, the Scheme Document or, as the case may be, any offer document subject to certain carve-outs is the same as the equivalent undertaking under
the Interim Facilities Agreement, which are described in the Scheme Document.

 

Moelis & Company, as financial adviser to Bidco: (a) has consented to the replacement of the Interim Facilities Agreement by the Bidco Senior Facilities Agreement; and (b) is satisfied that sufficient financial resources are available to Bidco to enable it to satisfy in full the cash consideration payable to Tiger Shareholders under the terms of the Acquisition.

 

Defined terms in this announcement shall, except where defined in this announcement or the context requires otherwise, have the meanings given to them in the circular to Tarsus Shareholders in relation to the acquisition (the Scheme Document).