July 28, 2011 / 4:48 PM / 6 years ago

Canada's OMERS fund buys shipping firm V.Group

LONDON (Reuters) - Canadian pension fund Ontario Municipal Employees Retirement System (OMERS) has agreed to buy Scotland-based shipping services company V.Group for $520 million, it said on Thursday.

The acquisition of V.Group from private equity firm Exponent was completed by the London office of OMERS Private Equity, which opened in September 2009 to build a mid-market private equity presence in Europe.

OMERS’ purchase of V.Group has been financed with $280 million of leveraged loans provided by Royal Bank of Canada Capital Markets (RBC). Additional banks are likely to be syndicated on the deal, sources close to the deal said.

The debt package includes a $90 million six-year term loan A paying 475 basis points (bps) over LIBOR; a $130 million seven- year term loan B paying 525 bps over LIBOR; a $40 million revolving credit facility and a $20 million acquisition facility both maturing in six years and paying 475 bps over LIBOR.

Exponent agreed the sale to OMERS after talks with Charterhouse Capital Partners broke down earlier this month after Charterhouse revised its offer and linked part of the payment to the future performance of V.Ships. Exponent preferred an all-cash offer, sources close to the matter said.

Clive Richardson will continue as V.Group’s chief executive.

Weil Gotshal & Manges advised OMERS on legal matters while Clifford Chance advised RBC.

Lazard advised Exponent with Allen & Overy providing legal advice. Law firm Travers Smith advised shareholders and management of V.Group.

Exponent bought V.Group with management in 2007 backed by $267 million of debt according to Thomson Reuters LPC data.

This included a $180 million, eight-year term loan B; a $60 million, seven-year acquisition facility; and a $27 million, seven-year revolving credit facility.

Under Exponent’s ownership, V.Group has completed three acquisitions including Norway-based engineering consultancy business RC Consulting in 2007, Dubai-based International Tanker Management in 2009 and Singapore-based underwater engineering company Maritime Underwater Maintenance and Services in 2010.

Formed in 1984, V.Group provides management and related marine services to the global shipping industry.

The Glasgow-headquartered company supplies services to a fleet of over 700 vessels and manages a crew roster of 24,000 staff.

(This story was corrected in the fourth paragraph to show the six-year term loan A was for $90 million, not $130 million; and seven-year term loan B was for $130 million, not $90 million)

Reporting by Claire Ruckin; Editing by Greg Mahlich and Erica Billingham

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