GE has agreed to sell its European Sponsor Finance business to Sumitomo Mitsui Banking Corporation Europe Limited (SMBCE), a wholly owned subsidiary of Sumitomo Mitsui Banking Corporation (SMBC) for approximately $2.2 billion. GE’s European Sponsor Finance business is one of the leading providers of sponsor finance for European mid-market, private-equity backed transactions.
Earlier this month, GE reached an agreement to sell its US Sponsor Finance business and a $3 billion loan portfolio to Canada Pension Plan Investment Board in a transaction valued at approximately $12 billion.
“As GE Capital continues to execute on its strategy to sell most of the assets of GE Capital, this agreement with SMBCE shows our European businesses are of great interest to financial services firms around the world,” said Keith Sherin, GE Capital chairman and CEO. “We had many indications of interest in this business and are pleased to partner with SMBCE on the sale of this franchise,” he added.
SMBCE’s has been active in providing sponsor finance since 1997 when the group founded its Leveraged Finance group in London. Since launch, the group has completed over 158 transactions with commitments in excess of $5.2 billion. The group’s current leveraged portfolio totals $1.9 billion.
“We are excited to announce this agreement to sell the European Sponsor Finance Sponsor Finance to SMBCE,” said Mr. Sherin. “This represents another important milestone as we continue to execute on our strategy to sell most of the assets of GE Capital.”
GE Capital will retain its $1 billion investment in the European Senior Secured Loan Program and European Loan Program; both are joint ventures between GE Capital and Ares Capital.
Bank of America Merrill Lynch and Citigroup Global Markets are providing financial advice to GE.
Sumitomo Mitsui Banking Corporation is a Japanese multinational banking and financial services company headquartered in Tokyo, Japan. It is a wholly owned subsidiary of Sumitomo Mitsui Financial Group and is the second largest bank in Japan.
The sale to SMBCE is expected to close in the third quarter of 2015.
© 2015 PEPD • Private Equity’s Leading News Magazine • 6-30-15
