Indigo continues sponsorless mezz activity

The London-based independent mezzanine capital provider is backing a UK pest control product maker’s acquisition of a US subsidiary.

Indigo Capital, investing from its €475 million Fund IV, has provided mezzanine capital to Sorex, a UK-based maker of pest control products, to fund the acquisition of Whitmire Micro-Gen Research Laboratories in the US.

Financial details of the transaction have not been disclosed. Royal Bank of Scotland provided senior debt and banking facilities. Indigo led and invested in the transaction alongside Alcuin Capital, another London-based specialist capital provider.

While investing alongside financial sponsors in European private equity backed transactions is Indigo’s main area of focus, the firm invests about 25 percent of its capital in so-called sponsorless deals.

Commented Kevin Murphy, a founder director of Indigo: “We’re probably slightly more active in this area than other dedicated mezzinane houses. You need to be able to originate assets rather than participate in deals where a sponsor does the work you. It’s about seeing a deal with a mezzanine risk and being comfortable with taking a minority interest in a company. Our sponsorless transactions have been very carefully chosen.”

Indigo expects to be an investor in Sorex for three to five years, Murphy added.

The engagement is Fund IV’s 10th investment. The vehicle, which closed in January 2003, is currently 40 percent invested.