A consortium of private credit lenders is in discussions to provide $1.3bn in financing for L Catterton's acquisition of healthcare technology platform Fullscript, after the transaction struggled to attract sufficient demand in the syndicated leveraged loan market, according to a report by Bloomberg.

A banking group led by Morgan Stanley had originally underwritten the debt at a maximum spread of four percentage points above the benchmark rate. However, preliminary discussions with leveraged loan investors reportedly failed to generate sufficient interest, prompting L Catterton and co-investor Altas Partners to explore direct lending alternatives.

The acquisition, announced in September, will see L Catterton and Altas acquire a majority stake in Fullscript from private equity firms HGGC and Snapdragon Capital Partners. Financial terms were not disclosed, while the transaction is expected to close on Tuesday, 10 November.

Apollo Global Management and Blue Owl Capital are reportedly among the lenders backing Fullscript's existing private credit debt, which carries a spread of 4.5 percentage points above the benchmark rate. The potential switch from syndicated lending to private credit highlights the growing role of direct lenders in financing leveraged buyouts amid volatility in traditional debt markets.