A large debt package underpinning KKR's acquisition of the electronics manufacturer is moving toward completion, with Citigroup and KKR's own credit arm each providing sizable pieces of the financing.
The debt financing behind KKR's roughly $5.7 billion acquisition of Integer Holdings is progressing, with Citigroup leading a $2.45 billion credit facility and KKR's own credit platform separately finalizing a loan of approximately $2.1 billion toward the transaction. No development has emerged that would block the financing from closing on the terms disclosed so far.
Buyout financing of this size, split between a bank-led syndicated facility and a direct loan from the sponsor's own credit arm, has become an increasingly common structure in large private equity transactions since banks pulled back somewhat from underwriting the full amount of buyout debt on their own balance sheets after recent years' volatility. KKR is one of a handful of large alternative asset managers that has built out a credit platform large enough to originate a multi-billion-dollar piece of financing for its own buyout, alongside a traditional bank-led tranche.
For investors tracking the leveraged finance market, the fact that a transaction of this size is attracting committed financing from both a major bank and the sponsor's own balance sheet is itself a data point on the health of credit markets for large-scale buyouts. It suggests lenders remain willing to underwrite substantial new leverage for well-capitalized sponsors on established assets, even as underwriting standards elsewhere in the market have tightened for smaller or less-proven borrowers.
The transaction is one of the larger buyouts moving through the market this year, and its financing structure is likely to be studied by other sponsors weighing how to fund their own large deals without relying entirely on syndicated bank debt. Barring a change in terms or a new complication, the deal appears to be on a path toward a straightforward close.