Helios Investment Partners: Blending lending
Perfect 10: Commodity Acquisition Finance Deal of the Year 2017
The first structure of its kind within the commodity finance space, Helios Investment Partners’ innovative blend of leveraged finance and trade finance techniques raised both the necessary funding for its purchase of Fertilizers and Input Holdings, and post-acquisition trade finance for the acquired asset.
Helios Investment Partners’ $110 million non-recourse leveraged acquisition and working capital financing – designed to fund its purchase of Fertilizers and Inputs Holding (FIH) – is the first structure of its kind within the commodity finance space.
Catherine Lang-Anderson, counsel at Allen & Overy, tells TXF: “The innovation here was in bringing the various elements together in one deal. The aim was to close the acquisition and immediately go into providing working capital using traditional trade finance techniques.”
The structure leveraged receivables accruing within FIH before the acquisition to help finance the purchase, and used the same techniques to provide ongoing trade finance for FIH after the sale had completed. According to Sanjeev Dhuna, partner at Allen & Overy: “This deal is a good example of the broader trend we are seeing in the commodity finance space, where traditional trade finance techniques are being used to finance complex acquisition and event driven situations.”
Credit Suisse was the sole financial advisor to Louis Dreyfus Company – parent company of Fertilizers and Inputs Holding – and Norton Rose Fulbright was primary legal advisor. Standard Chartered and Societe Generale were financial advisors and financing arrangers for Helios, and Vinson & Elkins was Helios’s legal advisor. Allen & Overy counselled Standard Chartered Bank and Societe Generale as arrangers and sole lenders on the acquisition.
Helios is an Africa-focused private investment firm established in 2004 and is one of the largest investment firms focusing on both French and English-speaking African countries. It is one of the few independent pan-African private equity investment firms to be founded and managed by Africans.
Fertilizers and Inputs Holding is a complex and sizeable business formerly part of SCPA Sivex International (SSI) and acquired by Louis Dreyfus in 2011. It carried out Louis Dreyfus’ Africa-based fertilisers and inputs operations, distributing fertilisers, crop protection products, seeds and industrial chemicals throughout Angola, Burkina Faso, Cameroon, Ivory Coast, Madagascar, Mali and Senegal. The company has annual sales of around $300 million. The company was originally establishment in 1947 and has been a top distributor of crop inputs and industrial chemicals.
At time of acquisition, Alykhan Nathoo, partner at Helios, said: “We are excited to invest in a business that has considerable scale and a long history in its key markets. Louis Dreyfus Company has been successful at expanding its fertilizers and inputs distribution network in Africa, which stands to benefit from the growing size and sophistication of the continent’s agriculture and industry. We look forward to providing expansion capital and working with management and key stakeholders to accelerate the growth of the business.”
The business contributes to Africa’s economic development by helping the advancement of agricultural yields by encouraging local manufacturing through the supply of chemical ingredients and through improved access to crop inputs and. The continents water purification industry, is also vitally supported by the company’s contributions. Additionally, Fertilizers and Inputs Holding educates and trains farmers and rural communities on agricultural best practices, facilitating the increase of farm productivity and rural incomes, as part of its distribution activities.
Helios Investment Partners
Leveraged acquisition and working capital financing
Sponsor: Helios Investment Partners
Acquisition: Fertilizers and Inputs Holding
Seller: Louis Dreyfus Company
Debt: $110 million
Signed: 15 November 2017
Arrangers: Societe Generale, Standard Chartered
Legal (borrower): Vinson & Elkins
Legal (lender): Allen & Overy
Legal (seller): Norton Rose Fulbright