Quinpario to buy two private companies with combined revenue of $1.5bn
Staff Writer | January 16, 2017
Quinpario Acquisition Corp. 2 entered into a non-binding letter of intent (LOI) to acquire and combine two privately owned companies.Article continues below
They should be forming a market-leading business process outsourcing platform with expertise in financial technology, information services and data processing.
These businesses are owned respectively by funds managed by a global private-equity firm with aggregate funds totaling at least $10 billion and a family office-affiliated fund with experience investing globally in sectors relevant to the proposed transaction.
There are meaningful synergies and strong industrial logic for these two private targets to combine, which will result in a pro forma company with approximately $1.5 billion of revenue and $385 million of EBITDA.
As a result of the compelling nature of the combination, both sponsors have agreed to roll 100 percent of their equity, which would result in combined pro forma ownership by the sponsors in excess of 50 percent. All proceeds from the proposed transaction would be used for deleveraging and for general corporate purposes.
The proposed transaction is valued at a total enterprise value of approximately $2.7 billion, representing an approximate 7.0x multiple on projected 2017E pro forma EBITDA for the combined company of $385 million.
The valuation at consummation of the transaction represents a meaningful discount to public comparable multiples in the financial technology and business process outsourcing sectors.
At the same time, this valuation and structure will facilitate a successful execution of the transaction, thereby providing the combined company with the requisite capital structure and capital market support to execute its business plan. ■
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