Loxam’s Complex Financing Transaction to Acquire Lavendon

February 24, 2017

Cleary Gottlieb represented Loxam, a leading European equipment rental group for the construction, industry, public works and events sectors, in connection with the €795 million financing of its all-cash offer for the entire issued and to-be-issued share capital of Lavendon plc, a UK-listed company regulated by the UK Takeover Code.

Cleary also represented Loxam in a subsequent high-yield notes offering, the proceeds of which were used to redeem the bridge financing facility.

The offer for Lavendon was one of only a handful of competitive UK public bids in 2016. Following successive increased offers made by Loxam and TVH Group N.V. in accordance with the procedures of the UK Takeover Code, Loxam’s offer was favored by Lavendon’s shareholders and declared unconditional.

The financing for the acquisition initially included a €775 million secured interim facility agreement entered into on December 14, 2016, composed of a revolving facility and a term facility, and amended on December 27, 2016, to increase the facility up to €795 million. The interim facility agreement was cancelled and replaced by a €795 million secured bridge facility agreement composed of a revolving facility and a term facility on February 10, 2017, after Loxam’s offer for Lavendon had been declared unconditional. Utilizations under the bridge facility were used to finance the acquisition of Lavendon shares and to refinance Lavendon’s existing indebtedness.

Subsequently, Loxam announced an offering of high-yield notes that priced on March 29, 2017, and closed on April 4, 2017. It included an offering of €300 million 3.500 percent senior secured notes due 2022, €300 million 4.250 percent senior secured notes due 2024 and €250 million 6.000 percent senior subordinated notes due 2025 pursuant to Rule 144A and Regulation S. The notes are listed on the Official List of the Luxembourg Stock Exchange and trade on the Euro MTF market. The proceeds of this offering were used to redeem the bridge facility agreement, to finance the acquisition of Lavendon, to pay for remaining Lavendon shares acquired through a squeeze-out procedure and certain costs and expenses in connection with the acquisition, and for other general corporate purposes.

In connection with this transaction, Cleary represented Loxam in the cancellation of its €50 million secured revolving credit facility entered into on July 18, 2014, and its entering into a new €75 million secured revolving credit facility with a five-year maturity on February, 28 2017. The firm also advised Loxam on certain UK corporate, M&A and Takeover Code matters relating to the financing transactions.