Local debt investor Arbitrium Capital seals first deal
Special situations/distressed debt investor Arbitrium Capital Partners is off and racing.
Street Talk understands the Sydney and Melbourne-based fund has stumped up the financing for Drillman Australia’s purchase of Swedish multinational engineering outfit Sandvik’s global drill manufacturing business. Drillman signed a deal to buy the Sandvik business unit late last year, which included the purchase of the Swedish giant’s explorations rigs and customer list, as well as the use of the Sandvik brand name for half a decade.
And it is understood it has turned to new-kid-on-the-block Arbitrium – which is chaired by ex-Toll Holdings chairman Ray Horsburgh – to help it fund the acquisition. While it was unclear how big the debt funding package was, Arbitrium has a mandate to ink deals between $20 million and $80 million.
It’s a sign of things to come for the firm, which is understood to be staring down a $500 million pipeline of potential mid-market debt deals. Arbitrium is still in fundraising mode since opening its doors last year. The firm has about $40 million under management and is looking to raise $300 million for its closed-e Its pitch to investors has been about capitalising on what it considers to be an under-serviced part of the Australian debt universe: mid-market companies with revenue between $50 million and $750 million. The firm’s strategy involves providing secured debt with equity warrants, which gives Arbitrium the option to take an equity stake in the businesses its helping its clients buy. It targets a three to five year time horizon to realise its investments.