NEW YORK (Reuters) – Independent oil exploration company Cobalt International Energy Inc became the latest private equity-owned company to seek to raise money in an initial public offering, according to a regulatory filing on Friday. Houston-based Cobalt International, which has ownership stakes in deepwater prospects in the Gulf of Mexico and the West African countries […]
As usual, we have a week's worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor's Ratings Services and Moody's Investor Services. As has been the trend toward the end of summer, the number of downgrades has significantly fallen off. I noted yesterday that even the number of private equity-backed companies on S&P's "Weakest Links" list seems to have dwindled. The list represents companies which are most likely to default, and part of the reason it's shrunk may be because many of the companies have already defaulted. Company: Builders FirstSource, Inc.
Sponsor: JLL Partners Inc. and Warburg Pincus LLC
Action: Moody's lowered the company's probability of default rating of to Caa3 from Caa1.
Highlight: The downgrade reflects the company's recent announcement that affiliates of JLL Partners and Warburg Pincus, which own approximately 50% of BLDR's outstanding shares, offered to recapitalize the company. Moody's view the situation, as proposed, to be a distressed exchange and the Caa3 PDR anticipates these events.
NTK Holdings Inc. (Nortek), a Providence, R.I.-based maker of ventilation, air conditioning and heating products, said that it will file for bankruptcy protection as part of a restructuring agreement with its lenders. THL Partners acquired NTK from Kelso & Co. in 2004, and held a 66.48% equity stake as of late 2007, when NTK canceled a proposed $690 million IPO.
Yesterday Harvest Partners, a buyout firm based in New York, announced a deal to invest $80 million in listed natural gas services provider Regency Energy Partners LP. The PIPE deal is just another in a line of private investments in public equities-since the credit crunch, private equity firms have been increasingly attracted to the investment style. And in some cases they may be rewarded handsomely for basically playing the stock market. Leonard Green Partners, for example, could earn roughly twice its investment in Whole Foods Market in a matter of a year or so. Last November, the firm purchased preferred stock which pays an 8% dividend and is convertible into common stock worth 17% of the company. At the time, the stock traded around $10 per share. Today Whole Foods stock closed at $27.40 per share. Others have been less lucky. Sun Capital Partners' public equities fund, Sun Capital Securities, has struggled after losing all of its investment in Sharper Image when the company went bankrupt in 2008. And of course there's TPG's famous WaMu misstep.
SEOUL (Reuters) – Sony Ericsson, Alcatel Lucent SA (ALUA.PA) and a private equity arm of JP Morgan (JPM.N) are among the candidates shortlisted to buy Nortel Networks Corp’s (NRTLQ.PK) stake in LG-Nortel, media reported on Wednesday. South Korean online news eDaily said citing an unnamed banking source that four companies had made it to the […]
Cloud Packaging Solutions, a portfolio company of Cameron Holdings, has acquired Toll Packaging Group LLC, a Gibson City, Ill.-based contract packager of food and consumer products. No financial terms were disclosed.
TOKYO (Reuters) – Japan’s Toshiba Corp (6502.T) plans to bid for French nuclear group Areva’s (CEPFi.PA) power distribution and transmission equipment unit, four sources with direct knowledge of the situation said, in a deal that could cost it more than $5 billion. Toshiba, which runs a far-flung electronics conglomerate, is focusing on its power generation […]
Archipelago Learning Inc., a Dallas-based provider of online education tools and services, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol ARCL, with BoA Merrill Lynch serving as sole underwriter. Providence Equity Partners acquired a majority stake in Archipelago Learning in January 2007, for $84.5 million. www.archipelagolearning.com
(Reuters) – Bankrupt luxury home builder WCI Communities Inc (WCIMQ.PK) said it has emerged from Chapter 11 as a private company, eliminating more than $2 billion in debt and liabilities. The company, once led by billionaire investor Carl Icahn, constituted a new board of directors comprising five members. Monarch Alternative Capital, a private investment firm, […]
Don't you just love a good "Background of the Offer" story? It's just like Days of Our Lives, only written by M&A lawyers. Exciting stuff. This week we got a peek at the action leading up to Advent International's agreement to purchase mall clothing retailer Charlotte Russe. We knew there would be some juicy details since buyout firm KarpReilly LLC had made a play for the company that went awry. This episode of Days of Our Private Equity Lives shows that once again, financing trumps price. Advent International won the auction with a lower bid because, according to the filing, "the greater certainty of closing under the Advent proposal outweighed the $0.25 per share difference in price between the two proposals." We saw the same phenomena earlier this year when Anheuser Busch sold KKR its Korean beer company, Oriental Brewery. Sources told peHUB that KKR's final bid was lower than two rival bids from local firms Affinity Equity Partners and MBK Partners, but KKR won the auction because its debt financing was guaranteed.