Reports indicate that Barclays PLC (BCS.US) is preparing to sell approximately $875 million in debt financing to support the acquisition of UK aerospace components supplier Senior. In April, Senior accepted a takeover offer from a consortium comprising Blackstone Group LP (BX.US) and Tinicum Inc., valuing the deal at around £1.4 billion ($1.9 billion), which outbid rival offers from firms such as Advent.
Insiders have disclosed that Barclays is leading a syndicate of banks in arranging this US dollar-denominated underwriting debt financing, with plans to sell it to institutional investors in the coming weeks. According to the underwriting agreement, the financing package consists of a $685 million senior secured term loan, a $190 million senior secured term loan, and a $150 million senior secured revolving credit facility.
Senior manufactures components for European aircraft manufacturer Airbus and its competitor Boeing, both of which are ramping up production to meet rising air travel demand. This acquisition represents the latest in a series of recent corporate mergers and acquisitions in the UK.
Earlier this year, US investment manager Nuveen announced the acquisition of UK-based Schroders for £9.9 billion (approximately $13.5 billion). In June, US food ingredients giant Ingredion proposed acquiring UK-based Tate & Lyle, a deal implying a total enterprise value of about £3.7 billion (approximately $5 billion).
Barclays is also one of the banks involved in another UK debt financing plan, providing £5 billion in funding to support EQT AB's acquisition of Intertek Group Plc. Despite concerns over the UK's political crisis, the surge in M&A activity continues.
Data up to May shows that the value of takeover deals targeting UK companies this year has surged over 250%, reaching approximately $150 billion. This marks the highest level for the period since 2015 and is nearly double the average for comparable periods.
Explaining the robust M&A environment in the UK, Kirshlen Mudali, UK advisory head at BNP Paribas, stated, "The UK market remains attractive, hosting numerous stable companies with strong profitability, global operations, and share prices that are lower than their US counterparts."
Kate Cooper, a partner in the M&A team at Freshfields law firm, noted that the global nature of many UK-listed companies further enhances their appeal to buyers seeking international expansion. "Technically, they are UK-listed companies, but due to the diversification of their operations, they are not truly UK companies in a strict sense. These businesses have a global footprint," Cooper explained.
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