Alcatel goes all sophisticated
The Sirona name has adorned dentists chairs in Germany, Austria and Switzerland for decades, and the strength of the brand has helped the company to make a successful debut in the fledgling European high-yield debt market.
The company has developed a position as Europe's biggest dental distributor and a market leader in a range of dental equipment, including X-ray technology. A Dm170 million ($95 million) 10-year bond was launched by Sirona on June 29, giving a much needed boost to the developing corporate market. The deal was lead-managed by Warburg Dillon Read, and used by Sirona to partly refinance its Dm701 million management buy-in from Siemens last December.
Though at the smaller end of the market as far as size goes, the deal has some interesting characteristics. Firstly, it attracted many buyers new to high yield and broke through the caution that many investors have felt towards the sub-investment-grade market. The borrower and its bankers conducted an extensive European roadshow and were rewarded by a 50% oversubscription for the bonds.
"We had been talking to potential high-yield investors for almost two years, and helping them analyze these types of deals," says Christopher Damico, executive director in leveraged finance at Warburg Dillon Read.