Bis gets a lifeline; Brookfield looks at Ixom; OZ beefs up BHP resistance

Good evening,

Another chapter has been written in the Bis Industries tale, which must be one of the most consistent sagas in Australian dealmaking in the past decade.

Ten years ago, Bis Industries was tucked up in KKR’s portfolio, had the full attention of KKR’s crack Capstone team, and was spinning yarns about saving miners millions, thanks to its data-driven approach to trucking ore.

KKR had a chance to float Bis Industries in 2013 but ended up pulling the deal when bookrunners Goldman Sachs, BoA and UBS came back with a deal that was half an EV/EBITDA point too low.

So KKR, having missed its exit and the chance to pay down debt inside Bis Industries, pushed on. The commodities cycle turned, negotiating contracts got harder and by 2017, Bis was sitting on a mountain of debt, a lot of which was payment-in-kind (PIK) notes to KKR.

In came a bunch of distressed debt funds, headed by The Carlyle Group’s Carlyle Strategic Partners and Varde Partners, who ended up taking control and recapitalising the business in a debt-for-equity swap in 2017.

The new owners had Deutsche Bank stitch together a funding package soon after, which was due to expire in April this year.

April came and, Bis being Bis, the company and its investors were trying to drive a hard bargain with lenders. The maturity date was kicked down the road until July, allowing for three more months of at times tense talks.

The refinancing was finally agreed on late last month, and settled this week. Street Talk has some of the details tonight, including a material equity top-up from Carlyle and Varde, the banking syndicate and the price paid for the debt.

Although it’s another chapter in Bis’ story, it’s not the end. It’s hard to see how Carlyle and Varde would own Bis forever, which is sure to keep it on bankers’ watchlists in the coming years.

Elsewhere, we take a look at the bidders for Ixom, and check in on BHP’s pursuit of OZ Minerals, now that everyone has had the chance to calm down a bit.

Happy reading,

Anthony Macdonald, Sarah Thompson and Kanika Sood
Street Talk Editors