Deal of the month
3~
WHAT'S NewS Issue 2 February 1998
deals
The cliënt: International
Medical Products
The deal: NLG 26 million
financial restructuring
Key players: Hal Cïerber and
Adam Johnson (London);
Leendert Mastenbroek (IMP
account manager Utrecht);
Cees Smit (general manager
Rabobank Zutphen)
International Medical Products
(IMP) is Holland's leading
independent manufacturer of
hospital supplies and medical
disposables. Founded in the
1960s, it went through several
relatively costly credits with
less expensive ones that better
reflect the company's improved
business outlook.
Rabobank Internationale role
in the story begins in London,
home base for the firms'
owners, a group of American
health care entrepreneurs. Hal
Gerber, Adam Johnson and
Oliver Wyncoll at our London
branch made overtures to these
entrepreneurs with a view
towards establishing an
eventual relationship. As these
preliminary contacts ripened
changes of ownership before
eventually being sold as part of
a management buy-in (MBI) in
993. The MBI was financed
by Kleinwort Benson (Dresdner
Bank) and BZW; other
credit facilities were also
extended by ABN Amro and
WUH (Westland/Utrecht
Hypotheekbank). Given the
higher risks of the business at
the time, IMP was saddled with
relatively costly mezzanine
financing and subordinated
debt.
The company, which now
boasts annual sales of NLG 65
million, has undergone
extensive restructuring. R&D
programs have been
accelerated, management has
teen reorganized, and new
ogistics and warehousing
concepts have been introduced.
As part of its drive for greater
productivity, management feit
it was important to replace
F.l.t.r. Louis
van Hooft,
Luuk Hans,
Leendert
Mastenbroek
and André
de la Combé.
and expanded, the owners
interest in financially
restructuring their Dutch-based
group became clear.
Since Hal Gerber and Adam
Johnson had already
established a relationship with
the customers involved, it was
decided that they would
coordinate the process out of
London. They were able to
facilitate the eventual
transaction, smoothing over
ruffles and coordinating
important discussions about
documentation and other vital
components of the deal.
'London's participation was a
key to success,' says IMP
account manager Leendert
Mastenbroek, who goes on to
point out that this deal was a
perfect example of how our
international operations can be
coordinated with our domestic
retail network.
Utrecht negotiated and put
together the bulk of the final
credit proposal, including
documentation, for a financing
package of senior debt that
consisted of two tranches. The
first tranche was a loan to the
IMP Group BV, the main
holding company. The second
tranche consisted of four loans
to the group's various
subsidiaries. These were used
to finance receivables,
inventory, plant and machinery,
and the mortgages on four
facilities, three of which are in
Holland and the last in
Germany.
But the story does not end
there. Cees Smit, general
manager of our member bank
in Zutphen (where IMP is
based) was involved in
discussions from the start.
While Utrecht and London
handled the details of the loan,
they also introduced IMP to
our Zutphen operation, and an
important consequence of the
deal, which was finally
concluded in late December, is
that IMP has shifted its
business from ABN Amro to
Rl/Utrecht and the local
Rabobank Berkel-IJssel branch
in Zutphen. Henceforth,
Zutphen will deliver the full
range of its banking needs,
from payments, current
account, clearing and deposit
transactions, generating
Adam
Johnson
(left) and
Hal Gerber.
F.l.t.r. Jan Dekker (general
manager IMP), Cees Smit
(general manager Rabobank
Zutphen) and Wim Vruggink
(controller IMP).
secondary benefits from the
deal.
An important relationship has
now been established with
American investors in our
strategie focus sector of Health
Care. IMP is active in a growth
field of the health care sector:
surgical and operating theater
products, including drainage
systems, surgical trays, and
disposables; long-term care
products, including mattresses,
incontinence systems and
feeding tubes; plus a wide
range of gynaecology,
laboratory, and sports in jury
products. The company's
turnover is now generated
primarily in the Netherlands
(53 percent), Germany (38
percent with the balance
elsewhere in Europe, but it is
also known to have ambitions
to expand.
'All of the signals that we are
getting suggest that the
American investors were very
satisfied with our
performance,' Mastenbroek
says. According to the group in
London, the bank has
established a strong contact
with the principals of a
company that is highly likely to
be involved in new acquisitions
in the health care field. It is
their hope that, having
demonstrated our commitment
to delivering customer value,
we can now look forward to
being offered a first bite of any
new cherries that eventually
appear.
