Earlier this month, we reported that Levine Leichtman Capital Partners had sued Apollo Management, in relation to the collapse of retailer Linens ‘n Things. Our post focused on the suit's primary allegations, so we glossed over a tidbit about how Linens was obligated to pay Apollo millions in fees. From the complaint:
Upon consummation of the Acquisition, the Company entered into a management services agreement with control person defendants Apollo Management V, an NRDC affiliate (NRDC Linens B LLC) and Silver Point. Under the agreement, the Sponsors agreed to provide to the Company certain investment banking, management, consulting, financial planning and real estate advisory services on an ongoing basis for a fee of $2 million per year. Under this agreement, Apollo Management V also agreed to provide to the Company certain financial advisory and investment banking services from time to time in connection with major financial transactions that may be undertaken by it or its subsidiaries in exchange for fees customary for such services purportedly after taking into account Apollo Management V’s expertise and relationships within the business and financial community. In addition, the Company paid a transaction fee of $15 million in the aggregate (plus reimbursement of expenses) to the Sponsors for financial advisory services rendered in connection with the Acquisition.
Apollo and its co-investors bought Linens 'n Things in late 2005, which means that they owned the company for just over three years. That would work out to $6 million in management fees, plus another $15 million for the transaction fee. So Apollo bled its own portfolio company for at least $21 million, plus whatever Linens might have paid Apollo for "financial advisory and investment banking services... in connection with major financial transactions."
Pegasus Capital Advisors has acquired a majority stake in Spirit Music Group, a New York–based music publisher with a catalog of more than 15,000 songs. No financial terms were disclosed.
(Reuters) – Chrysler is working around the clock to complete an alliance with Italy’s Fiat SpA (FIA.MI) that would also result in a new board for the U.S. automaker, Vice Chairman Jim Press said on Wednesday. Chrysler, about 80 percent controlled by Cerberus Capital Management CBS.UL, was given until the end of April by the […]
BDCs (business development companies) need money. SPACs (special purpose acquisition vehicles) have money they need to deploy. BDC, meet SPAC. It sounds like alphabet soup, but several SPACs and BDCs are discussing transactions, according to Michael Tew of research firm SPAC Partners. And it does seem to make sense. BDCs, which provide financing to middle and lower middle market companies, use their balance sheets to maintain strict leverage ratios, which means that they really could use some liquidity. Moreover, BDC share prices have plummeted in recent months, at the very time when their product is in high demand. Enter the SPACs. They have money. According to Tew, there are around 40 SPACs with about $9 billion in equity that have yet to announce a deal. Since many of them will meet their "invest or fold" deadlines within the next 12 months, they’re scrambling to find suitable targets and fighting for the same deals.
LONDON (Reuters) – Private equity house CVC Partners will pick up a rare commodity if it pulls off a purchase of Barclays’ iShares exchange traded fund (ETF) unit, which analysts say has strong growth potential. A clear leader both in the U.S. and European markets, the unit saw record net inflows of $89 billion last […]
(Reuters) – Jane & Co, a cosmetics brand with annual revenue of about $25 million, filed for Chapter 11 bankruptcy protection on Monday, court documents show, citing cash liquidity issues arising from the economic crisis that affected retail customers nationwide. The Baltimore company said in the April 6 filing it has assets of between zero […]
Winona Capital Management has acquired a majority stake in Peter Millar, a maker of premium lifestyle apparel. No financial terms were disclosed.
Savana Partners has acquired the assets of Epitome Systems, a Wayne, Penn.-based provider of business process automation solutions. No financial terms were disclosed. Michael Sanchez, managing partner of Savana, will serve as Epitome’s chairman and CEO.
PHILADELPHIA (Reuters) – Wireless telephone assets being divested by Verizon Communications have attracted bids from at least three private equity firms, sources familiar with the situation said on Tuesday. Private equity firm Blackstone Group LP (BX.N) submitted a bid by last week’s deadline, while Carlyle Group [CYL.UL] and Kohlberg Kravis Roberts & Co [KKR.UL] made […]
Bankruptcy-related M&A surged in March with 34 acquisitions ($698mln), a level not seen in five years, since August 2004 (38), according to Thomson Reuters. “In the previous economic cycle bankruptcy-related M&A peaked in July 02 with 86 transactions announced and 8 months before equity markets reached the bottom and started their recovery,” a report from this morning stated. Meanwhile, according to data from Bankruptcy Week, the number of public companies that filed for Chapter 11 bankruptcy protection was almost as much as the two prior months combined. March saw 31 public companies go bankrupt. Add that to the respective 18 and 19 from January and February, and the total for public companies in Q1 is 68. That’s quite a few more than the private equity-backed company total of 25 (although some of them, like KKR’s Masonite, count as both). Follow the jump for charts.