Bain Capital LLC's credit affiliate, Sankaty Advisors LLC, and Deutsche Bank, are buying GE Capital's Commercial Lending and Leasing portfolios in Australia and New Zealand as part of General Electric Corp.'s (NYSE: GE) planned divestiture of GE Capital. Terms of the deal were not disclosed.
The portfolio has more than A$2 billion (U.S. $1.31 billion) in exposure to five different asset pools: debtor finance, corporate aviation finance, leveraged finance, equipment finance and asset-backed lending. There are more than 500 borrowers across the portfolio.
Deutsche Bank is a co-investor in the deal.
Boston-based Sankaty manages more than $26 billion in assets and invests in leveraged loans, high-yield bonds, distressed and stressed debt, mezzanine debt, structured products, real estate and equities. The GE Capital deal is the latest in a string of acquisitions for the business as it works to expand in the Asia-Pacific region. In 2014, the firm bought J.P. Morgan's Global Special Opportunities Group for $1.3 billion. Sankaty also picked up a portfolio of performing and stressed corporate loans from Lloyds in Australia in 2013.
For GE, the sale is just the latest in a series of exits following CEO Jeffrey Immelt's April 10 announcement that the company would shed most of GE Capital to refocus on industrial operations. Most relevant to middle-market M&A, the business sold Antares Capital (then, GE Antares), to Canada Pension Plan Investment Board in August. Antares lends primarily to private equity-backed middle-market businesses, and had been acquired by GE in 2005. For more on that sale, see For GE Capital's Coveted Antares Unit, New Owner Means Expansion Beyond Senior Debt.
The company's other divestitures include: the commercial lending and leasing unit, which will be sold to Wells Fargo & Co. (NYSE: WFC); the corporate aircraft lease and loan portfolio, sold to PE firm Global Jet Capital; and the Mubadala GE Capital loan portfolio, purchased by MidCap FinCo. Ltd. and funds managed by Apollo Global Management (NYSE: APO). GE is now more than 60 percent of the way through the divestiture.
Ashurst and Herbert Smith Freehills was legal adviser to Sankaty and Deutsche Bank (NYSE: DB). Morgan Stanley (NYSE: MS) advised on the sale, and King Wood Mallesons and Minter Ellison advised GE. Kirkland & Ellis advised Sankaty on financing for the deal, which was announced Nov. 9.