Buyout of Kersia by IK Investment: First LBO financing in France that includes sustainability-linked features
The acquisition of Kersia by IK Investment has been financed through a Sustainability-linked syndicated leverage loan structure including RCF & term loan B tranches, in line with the Loan Market Association’s Sustainability-linked loan Principles. Natixis was pleased to act as Sole Sustainability coordinator for this transaction.
Kersia was created in 2016 following the initial purchase of Hypred by Ardian. Kersia is today a global leader in biosecurity solutions for the Food & Beverage, Farm and Healthcare industries.
In line with its firm commitment “to act for a positive world”, Kersia has identified and worked around three Sustainability Key Performance Indicators (KPIs) and associated annual targets over the life of the financing. The achievement of these targets will make Kersia benefiting form a reduction of 7,5 bps in margins. In case of failure, the margins will increase by the same proportion.
The three KPIs have been carefully selected by Kersia to be relevant and material for the biosecurity solutions sector.
- KPI #1: the share of Green products offered, which captures the direct impact of Kersia’s products sold.
- KPI #2: the number of countries implementing a system for collecting and for recycling empty packaging, which captures the impact of Kersia’s operations.
- KPI #3: percentage of employees of the Group (excluding general managers and executive committee members) who are given the opportunity to become shareholders of the Group.
Through this unusual and innovative last indicator, Kersia demonstrates its commitment towards responsible governance, involving all its employees in the value creation and sharing of the company.
Last, a Sustainability Auditor of international reputation will be appointed to perform the annual verification of the Sustainability KPIs and the CSR Annual Report of the Company. The transaction gathered a high number of leverage investors, not used to this mechanism, which have well received the sustainability features perceived as a new and positive enhancement of the company CSR strategy.
This transaction, which is at the fore front of innovation in the “Sustainable Finance space”, will pave the way for future transactions in the LBO/High Yield Bond market as it is also developing in the Sponsor Finance market.