Macquarie Group Acquires Boart Longyear with $1.395 Billion Credit Facility

Macquarie Group, a leading financial services firm, has agreed to acquire an undisclosed shareholding in Boart Longyear through a $1.395 billion credit facility. The facility consists of various loan components, including a five-year revolver, a one-and-a-half year capital markets term loan, a six-year term loan B, and a seven-year second lien term loan. Macquarie Bank, led by institutional investors, will become a major shareholder in Boart Longyear following the deal's closure in October. The acquisition brings significant capabilities to Boart Longyear, including expertise in natural resources investing, geographic scope, financial market expertise, and knowledge of key mining geographies.

Key Takeaways:

• Macquarie Group has launched a $1.395 billion credit facility for the buy-in of Boart Longyear by Macquarie Group, led by Australia's Macquarie Bank.
• The facility consists of a $125 million five-year revolver, a $320 million one-and-a-half year capital markets term loan, a $650 million six-year term loan B, and a $300 million seven-year second lien term loan.
• Price talk was set at Libor plus 325 basis points (bps) and Libor plus 700 bps, on the first and second liens respectively.
• Macquarie brings a significant set of new capabilities to Boart Longyear, including expertise in natural resources investing, its wide geographic scope, its financial market expertise, and its deep knowledge of key mining geographies.
• Boart Longyear announced expected sales to reach $1.17 billion this year, with $588 million from the manufacture and sale of drilling equipment and $582 million from the provision of drilling services.
• The company plans to compile a "world-class team" to expand its mining operations into under-penetrated countries such as Brazil, Russia, and China, and diversifying into drilling services for the water, environmental, and energy markets.
• Macquarie Group has secured the largest shareholding in Boart Longyear, following the acquisition, along with private equity firms Advent International and Bain Capital, who sold the company for $545 million in cash in July 2005.

Statistics:

• $1.395 billion: The size of the credit facility launched by Macquarie Group for the buy-in of Boart Longyear.
• $1.17 billion: Boart Longyear's expected sales for this year.
• $588 million: Boart Longyear's expected sales from the manufacture and sale of drilling equipment.
• $582 million: Boart Longyear's expected sales from the provision of drilling services.
• 10 years: The total duration of the credit facility.
• Libor plus 325 bps: The interest rate on the first lien.
• Libor plus 700 bps: The interest rate on the second lien.

Sources:

• Bank Loan Report and SourceMedia, Inc.