Two buyout firms, Avista Capital Partners and Nordic Capital, have agreed to purchase ConvaTec, a division of Bristol-Myers Squibb, for $4.1 bn.  ConvaTec makes products for wound care and ostomies.  Last spring this deal would have gotten almost no ink the press but now it is big news.  Apparently this deal has committed financing.  Pretty amazing.  This is a seachange compared to this fall and summer when no matter how uncyclical a company was, no matter how much cash flow it had, and no matter how much sense the deal made for the sponsor (i.e. the sponsor already owned a company that they wanted to merge with the acquisition target) no one could get committed financing.
Daniel Primack at PE Hub discovered on Friday that J.P Morgan is leading the lenders.  He also got the opinion from the sponsors that the process to get committed financing was made easier by ConvaTec's high cash flow and lack of cyclicality.  A few months ago you could make those arguments until you were blue in the face and not get committed financing.  The banks must believe that the leveraged loan markets improvement is here to stay if they are handing out this much debt at terms that a sponsor could accept.  It is also interesting to note that ConvaTec was probably shopped around by its advisors as an LBO candidate and Avista and Nordic probably won a competitive bidding process.  Look out strategics, the PE sharks may soon be back in the water.
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