PE HUB Wire Highlights, 10.2.19


Photo of Luisa Beltran, PE HUB Senior Editor, courtesy of Buyouts Insider.

Warburg puts RS Energy Group up for sale; Arbor gobbles up Bakery Cos; Where August Capital stands now

Happy Wednesday!

Some unease this morning regarding Apollo Global‘s buy of Shutterfly. Investment banks have struggled to raise about $2 billion in debt to back Apollo’s acquisition of Shutterfly, press reports said. Barclays and Citi agreed to buy up to $280 million of the financing themselves after failing to find enough outside investors, the Wall Street Journal reported. The deal shows how much harder it is for Wall Street to unload risky debt since August’s global selloff, the story said.

U.S. direct lending is also expected to pick up as the PE M&A pipeline swells, Bloomberg reported.

This got me thinking about last week’s PartnerConnect West conference. Some debt investors were talking at the conference about the craziness in the loan market. The investors said they are planning for some sort of recession. Interestingly, such an event may be good because “everything will get reset once there is a correction,” one of the executives said. (The investors were also very annoyed about the frequent use of adjusted Ebitda in deals but that’s another story.) “There will absolutely be carnage,” one lender said.

Hubsters, are you looking forward to a correction? Would this bring some sanity back to the credit markets? To M&A? Email me your thoughts at lbeltran@buyoutsinsider.com

Lots of deals this morning. Blackstone is buying 65 percent of Great Wolf Resorts from Centerbridge Partners. Blackstone and Centerbridge are forming a new $2.9 billion joint venture to own the company. See our brief here.

This doesn’t look like a complete exit for Centerbridge. The firm acquired Great Wolf, an indoor water-park operator, in 2015 from Apollo.

It’s another bakery deal for Arbor, which has invested in Bakery Cos. The Nashville company, founded by Cordia Harrington, the so-called “bun lady,” makes buns and English muffins for customers including McDonald‘s, Five Guys and Pepperidge FarmsFind out more about the deal here.

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