(Bloomberg) -- Lenders led by Ares Management Corp. are set to provide a roughly $1.8 billion debt package to support Genstar Capital’s purchase of a stake in payments processor AffiniPay, according to people with knowledge of the matter.
Oak Hill Advisors is also among those helping finance the deal, said the people, who asked not to be identified as the details are private. The transaction will give Genstar a roughly 50% stake in AffiniPay, they said.
The package includes a $1.2 billion term loan as well as $300 million of preferred equity, the people said. The loan carries interest at 4.75 percentage points over the Secured Overnight Financing Rate and priced at 99 cents on the dollar, they added.
The private credit lenders also provided a $200 million delayed draw term loan and a $100 million revolving credit facility as part of the deal, according to the people.
The purchase comes as private equity firms engage in a slow revival of new M&A transactions as they try to return capital to their investors. Private credit lenders have been waiting for deals to come back as they sit on record amounts of money ready to be lent.
Spokespeople for Genstar, Ares and Oak Hill declined to comment, while a representative for AffiniPay didn’t respond to a request. The stake sale was announced earlier this week without financing details.
Third Quarter
The sale is expected to close during this year’s third quarter, the people said. Existing backer TA Associates will continue to hold a stake and control the company jointly with Genstar, according to the statement. The deal allows Apax to exit its stake in AffiniPay.
Similar transactions are underway elsewhere. This week, Avista Capital Partners said it sold a stake in Cosette Pharmaceuticals to Hamilton Lane. As part of the deal, the company inked a new term loan with Hayfin Capital Management, according to a statement.
Founded in 2005, AffiniPay sells payment tools for professional services businesses like law and accounting firms. It gives customers the ability to accept payment by credit card, debit card and eChecks, according to its website.
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