(Bloomberg) -- Ares Management Corp. is exploring a potential buyout of industrial manufacturer Form Technologies, people familiar with the matter said.
The investment firm is considering financing the deal in part through a combination of preferred equity and common shares and is seeking a co-investor to participate in the equity portion, the people said.
Jefferies Financial Group Inc. has also been sounding out investors about a debt package to help fund a buyout of Form, which is backed by Partners Group Holding AG, according to the people. A US$650 million term loan is being pitched with an interest rate of around 450 to 500 basis points over the Secured Overnight Financing Rate, they said.
Deliberations are ongoing and pricing terms on the loan could still change. Ares may also decide against pursuing a deal, the people said, asking not to be identified discussing confidential information.
Spokespeople for Ares, Form and Partners Group declined to comment. A representative for Jefferies didn’t immediately respond to requests for comment.
Form has been exploring strategic options, including a potential sale, as it faces about $900 million of debt maturing next year, Bloomberg News reported in April.
The company’s existing debt stack was put in place as part of an amend-and-extend transaction in 2021. Its $633 million first-lien term loan maturing in July 2025 is quoted at around 96.5 cents on the dollar, data compiled by Bloomberg show.
Based in Charlotte, North Carolina, Form traces its origins back to a company founded in the 1930s called Gries Reproducer Corp. It engineers small, metal parts for cars, computers and other products, according to its website.
Partners Group agreed to acquire a controlling stake in Form’s predecessor Dynacast International in 2015 from Kenner & Co., in a deal that valued the company at $1.1 billion, including debt. Ares is a holder of the company’s preferred equity, the people said.
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