FRP advises on landmark ABL deal

Background

Aurelius is a pan-European investment group focused on improving the operational performance of companies by providing management capabilities and financial resources for investing in products, sales and R&D. Operating from offices in Germany and the UK, Aurelius has a track record of successful investment in more than 100 business across a range of geographies, industries and sectors. The company was looking to acquire McKesson UK, the owner of several market-leading pharmaceutical businesses including the LloydsPharmacy chain and AAH Pharmaceuticals, and engaged FRP to assist in a debt-raising process.

Action

FRP was appointed as debt adviser to Aurelius, to assist in arranging and negotiating one of the largest syndicated asset-based lending (ABL) transactions in the UK in recent years. Our Debt Advisory team secured a £357.5 million ABL facility provided by a syndicate of six lenders (led by Barclays) to fund the acquisition, which saw McKesson UK separated from its former US-based parent company, McKesson Corporation, in a process that ran for several months.

Outcome

The successful landmark deal represented Aurelius’ biggest acquisition since it was founded in 2006; McKesson UK is a £5.7 billion turnover business with more than 18,000 staff across its retail, digital, homecare and wholesale divisions. The deal will see McKesson UK benefit from new opportunities as a standalone business, underpinned by its strong retail brand, loyal customer base and leading commercial footprint across wholesale pharmaceuticals. The transaction is the biggest ABL deal that FRP has supported to date; globally there are only a handful of deals of this scale each year, reinforcing the firm’s position as the pre-eminent ABL adviser in the UK.