Sea Change in Large Buyout Debt Sourcing


October 9, 2014

The bidding war for a buyout of Tesco’s consumer data warehousing and analysis subsidiary, Dunnhumby, got a lot of press this week for the sheer size of the deal, but another large-buyout in the works provided more insight into the changing world of PE and leveraged buyouts, at least in terms of where the money will come from for future deals, particularly those that put a lot of debt onto the target company.


TransWorld is a USD 1.5 billion PE target, according to Reuters. The secondary deal sees Vista Equity buying from rival PE house Welsh, Carson, Anderson & Stowe. The deal has a debt package to go with it that some of the largest banks are not touching due to regulatory compliance issues, according to both Reuters and the WSJ. Alternative financing was sought, and found, from other sources that are not under the same regulations, according to Bloomberg, namely Jefferies, Nomura Holdings and Guggenheim Partners.

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