Apax, advised by Houlihan Lokey Inc., has been in talks with Marken's lenders for several months after Marken breached debt covenants. Its main creditor is Lloyds Banking Group plc, which in January 2010 underwrote £365 million of syndicated debt to fund the purchase a month after Apax struck an initially all-equity deal with seller Intermediate Capital Group plc.
Aside from Lloyds, other debtholders include distressed debt investor Alcentra Group Ltd., a unit of Bank of New York Mellon Corp.
Marken and lenders have been unable to agree on a refinancing package or on Apax's offer to stump up £50 million more equity to gain greater headroom, according to a person familiar with the situation.
The lenders plan to conduct a review of Marken, which would likely lead to a sale. It was unclear which bank will conduct that review, with the source suggesting they would choose from a shortlist of four. Rothschild has been advising the lender since around February, according to Reuters.
Apax's purchase of Marken was one of the first big-ticket deals after the private equity slump triggered by the collapse of Lehman Brothers Holdings Inc. in September 2008 and was credited with reviving the leveraged buyout market.
The buyout firm has four representatives on Marken's seven-strong board, which is led by chairman Gerard Barba. Marken's CEO is Wesley P. Wheeler.
Marken handles the time-critical, two-way transportation of biological samples and pharmaceutical drugs between central laboratories and hospitals around the world. Since the Apax buyout, Marken has had to battle increased competition from other logistics groups and a downturn in the clinical trials market.
Apax and Marken declined to comment Thursday, as did a spokeswoman for Houlihan Lokey. Rothschild and Lloyds also had no immediate comment.
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