The excitement surrounding buyout-backed IPOs is heartening at best and over-hyped at worst. Even though companies have steadily filed for IPOs for the past ten weeks (the longest streak in over a year), some industry professionals believe the market recovery won’t heal most private equity wounds. “The idea that going public is a panacea for private equity guys is not really true,” said Dan O’ Donnell, the private equity chair at law firm Dechert LLP. Even with a successful portfolio company IPO, a buyout firm faces the same issues it did before, including frustrated limited partners, he said. That’s because an IPO does not translate directly to cash in the LP’s pocket, like a sale to a strategic buyer would. “Absent a dividend recap, it’s unlikely that the sponsor will be able to do a direct cashout,” O’Donnell said. The private equity firm is typically left with a large, somewhat illiquid position that it will gradually exit over time.
This week's edition of the Laundry Room Chronicles is about eBay's agreement to sell a 65% stake of Skype to a group of private investors, at an enterprise value of $2.75 billion. Buyers include Silver Lake Partners, Canada Pension Plan, Andreessen Horowitz and Index Ventures. Also worth noting that this deal would be the year's largest leveraged buyout of a U.S.-based company (based on eBay's headquarters), or the third-largest buyout of a foreign company (based on Skype's Luxembourg headquarters). The sale is not financing-contingent, but does have debt lined up from JP Morgan, Barclays and RBC.
(Reuters) – Payments processor Cynergy Data LLC filed for Chapter 11 bankruptcy protection on Tuesday and said it has agreed to sell all its assets to private investment firm ComVest Group through a court supervised auction. ComVest will act as a “stalking horse” bidder for Cynergy’s assets at the auction, according to papers filed with […]
LONDON/FRANKFURT (Reuters) – BC Partners agreed to take control of two lab-testing companies and merge them into a group with annual sales of 380 million euros ($545.6 million) in one of Europe’s few sizeable private-equity buyouts this year. Sources familiar with the matter said the deal gave the group an enterprise value of about 500 […]
NEW YORK (Reuters) – TCW Group Inc Chief Investment Officer Jeffrey Gundlach told Reuters on Tuesday that no private equity firm has spoken with him about acquiring the money management giant from its parent, France’s Societe Generale (SOGN.PA). The New York Post reported that Kohlberg Kravis Roberts is among a number of private-equity firms engaged […]
Global M&A volume for August was approximately $93 billion, according to Thomson Reuters (publisher of peHUB). This includes around $7.2 billion of private equity volume, which is a marked decrease from the $13.22 billion in July. The percentage of PE as part of the M&A whole, however, only dropped from 8.4% to 7.7 percent. Private equity volume last August was $13.5 billion, compared to $148 billion of global M&A. You can download the full spreadsheet by clicking here.
NEW YORK (Reuters) – Two large private equity investors in Builders FirstSource Inc (BLDR.O) on Tuesday unveiled a plan to recapitalize the money-losing provider of residential construction products, saying changes are needed to position it for a housing market recovery. Funds run by JLL Partners Inc and Warburg Pincus, which together own 49.9 percent of […]
(Reuters) - Internet auction and services company EBay Inc has reached a deal to sell its online telephony unit Skype to a group of private investors, the New York Times said, citing two people briefed on its plans. Andreessen Horowitz, a new venture capital firm headed by the Netscape co-founder Marc Andreessen, is likely to be among the investors in the group, the paper cited the people as saying. London-based Index Ventures and Silver Lake Partners may also be involved in the deal, one of the people told the paper. The paper added that the value of the deal, which is likely to be announced later on Tuesday, had not been disclosed.
TOKYO (Reuters) – Permira, KKR and CVC Capital are among the private equity firms bidding for Bellsystem24, Citigroup’s (C.N) telemarketing company in Japan, three sources said, in a deal that could fetch more than $1 billion. Bain Capital and trading house Itochu Corp (8001.T) have also submitted bids, said the sources, asking not to be […]
J.F. Lehman & Co. has completed its acquisition of marine services business Drew Marine from Ashland Inc. (NYSE: ASH). The deal was valued at approximately $120 million. An earlier LBO Wire report said that the transaction would include more than $70 million in debt financing, with CIT and BNP Paribas arranging senior debt, and Babson Capital arranging around $20 million in mezzanine notes.