Ares-Led Group Provides Private Loan for InvoCare Buyout

TPG Inc. has lined up a group of private credit funds led by Ares Management Corp. to help finance its acquisition of Australian funeral home operator InvoCare Ltd., according to people with knowledge of the matter.

(Bloomberg) — TPG Inc. has lined up a group of private credit funds led by Ares Management Corp. to help finance its acquisition of Australian funeral home operator InvoCare Ltd., according to people with knowledge of the matter.

The funds have agreed to provide A$800 million ($521 million) of debt for the acquisition, including a A$675 million of funded term loan and a A$125 million delayed-draw term loan, said the people, who asked not to be named because details of the transaction are private.

The lender group also includes Barings, KKR & Co., Macquarie Group Ltd., Nomura Holdings Inc., Partners Group, and Pierfront Capital, according to the people. The unitranche loan — which is a blend of senior and subordinated debt — pays a spread of 625 basis points over the Australian benchmark rate, they said.

The financing includes a small payment-in-kind feature that gives the borrower the option to pay some of the interest with additional principal, the people said. The loan has a maturity of six years, one of them added.

A spokesperson for TPG declined to comment, saying the firm never discloses financing details. Representatives for Ares, KKR, Macquarie, Nomura, and Partners Group declined to comment. Barings and Pierfront didn’t respond to requests for comment.

Sydney-based InvoCare has agreed to a revised A$1.83 billion takeover offer from TPG, closing the book on months of brinkmanship between its board and the private equity giant over terms.

Ares had originally offered to provide the entire debt financing but its share was scaled back after other lenders expressed interest in the transaction, the people said.

Funded debt will give Invocare leverage of between 5.5 and 6 times earnings before interest, taxes, depreciation and amortization.

(Updates to add Barings as lender, PIK structure and loan maturity starting in third paragraph. A prior version of this story was corrected to remove the name of a lender who isn’t involved.)

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