Goldman, Morgan Stanley Prep €1 Billion for CVC’s Multiversity

(Bloomberg) -- Banks including Morgan Stanley and Goldman Sachs Group Inc. are lining up nearly €1 billion ($1.1 billion) of debt financing that will allow buyout shop CVC Capital Partners to hold on to Multiversity, one of its university investments, according to people familiar with the matter.

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The bridge loan will support CVC’s plan to move the Italian university group into a so-called continuation fund. Continuation funds are one of the tools deployed by investment firms to manage their portfolio companies, by allowing sponsors to roll over assets bought through older funds into a new vehicle. The process enables investors to either hold on to the assets for longer than the typical investment cycle, or to cash out of their stakes.

Other underwriters on the debt raise include Bank of America Corp., Deutsche Bank AG, CVC Capital Markets, UniCredit SpA, BNP Paribas SA and Credit Agricole SA, the people said, asking not to be identified as the details are private. A high-yield bond offering is expected to follow the raise, according to one of the people.

The company currently has €765 million in high-yield bonds outstanding which mature in October 2028.

Representatives for CVC, Morgan Stanley, Bank of America, BNP and UniCredit declined to comment, while those for Goldman, Deutsche and Credit Agricole didn’t immediately return requests for comment.

CVC initially invested in Multiversity in 2019 through its CVC Capital Partners VII fund, and would go on to acquire the Italian online higher education provider two years later.

It now plans to transfer the business from CVC Capital Partners VII and into the new continuation fund, in which CVC Capital Partners VIII is also expected to be an investor, according to an April 16 statement. The fund will be structured as a single-asset vehicle, as Bloomberg previously reported.

Multiversity has shown “impressive performance” since CVC’s initial investment, the private equity firm said in its statement, pointing to the business’s ability to tap an “under served and largely under penetrated Italian undergraduate market.” CVC also noted that the extension of the partnership would allow it to support Multiversity’s growth ambitions while providing continuity and stability.

Lazard and Morgan Stanley are financial advisers to CVC on the transaction, which is subject to customary investor approvals.

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