(Bloomberg) -- Goldman Sachs Group Inc. has lined up around €350 million ($389 million) of debt financing to back Italian IT group Almaviva SpA’s purchase of US tech firm Iteris Inc., according to people familiar with the matter.
The debt is in the form of a bridge loan that will ultimately be taken out by high-yield bonds, the people said, declining to be identified because the information is private. Almaviva agreed to acquire Iteris last month in a transaction which valued the company at around $335 million.
Traditional lenders are very much looking to fund leveraged transactions, with a number of underwrites set to come to the market in the next few weeks. They include a €1.7 billion debt financing for KPS Capital Partners’ purchase of Innomotics, which is likely to be pitched to investors this month.
With US interest rates seen falling, banks are more confident they can underwrite deals and sell the debt on via the syndicated market. Goldman’s move to provide the entire financing for the Almaviva underwrite is also a sign of banks’ willingness to add risk to their balance sheets in light of still-moribund dealflow.
Goldman Sachs and Almaviva did not immediately respond to requests for comment. The deal is expected to close this year, subject to approval.
Buyout Deals
Banks are keen to win the generous fees from buyout deals again, after finding themselves stuck with risky debt on their balance sheet when the market suddenly turned in 2022 on the back of a rapid rise in rates. That allowed direct lending powerhouses like Blackstone Inc. and Ares Management Corp. to beat them at their own game.
Almaviva provides IT services in Italy and digital relationship management outsourcing services in Latin America, employing 45,000 people worldwide. The group recorded revenues of €1.16 billion in 2023, according to its annual report.
The company already has €350 million of high yield bonds maturing in 2026 and quoted at 101 cents on the euro, according to data compiled by Bloomberg.
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