DLJ Merchant Banking Partners spins out from Credit Suisse

DLJ Merchant Banking Partners, Credit Suisse‘s mid-market leveraged buyout business, has spun off into an independent advisory firm, aPriori Capital Partners, established by the existing DLJ MBP management team led by Colin Taylor and Susan Schnabel. aPriori Capital will manage the DLJ Merchant Banking Partners III, L.P. and DLJ Merchant Banking Partners IV, L.P. private equity funds (together with related vehicles, the MBP Funds), collectively representing approximately $2 billion of value across 22 portfolio companies as of December 31, 2013.

Vision Capital Acquires Vitopel

Vision Capital has acquired Vitopel from funds advised by DLJ Merchant Banking Partners and J.P. Morgan Partners. Vitopel is a producer of BOPP (bi-axially oriented polypropylene) film in Latin America, generating over $300 million of revenue in 2011. As part of the transaction, Vision Capital completed a debt restructuring led by Vitopel’s existing creditors, Credit […]

Warburg Buys Total Safety

Private equity firm Warburg Pincus will buy DLJ Merchant Banking Partners’ Total Safety, a provider of outsourced safety and compliance solutions to clients requiring education and training. Specifics of the deal were not publicized. Total Safety is based in Houston, Texas. PRESS RELEASE: Warburg Pincus to Acquire Total Safety HOUSTON, Sep 07, 2011 Total Safety, […]

Nestle Health Science Buys Prometheus Labs

Nestle Health Science, a subsidiary of Nestle SA, will buy specialty pharmaceutical and diagnostic company Prometheus Laboratories Inc. for an undisclosed amount, the company announced Tuesday. Prometheus is focused on developing science-based nutritional solutions for medical conditions. The company had raised funding from investors including DLJ Merchant Banking Partners, SPVC, Sprout Group, Apax Partners, Pamlico Capital and Brentwood Venture Capital.

2010 Biggest Year for M&A Exits Since — Really? — 1985

Were you sniffing about the economy last year? You must have been among the seemingly select few who didn’t sell their startup in 2010. According to new exit data published by peHUB parent Thomson Reuters and the National Venture Capital Association, last year saw more venture-backed M&A exits since people began recording this kind of thing in 1985. According to their findings, 420 deals were sewn up last year, roughly 18 percent of them IT-based.

A notoriously slow period of deal-making, even 2010’s fourth quarter was pretty good for M&A, with 88 venture-backed M&A deals reported as of December 31. Combined, the average disclosed deal value in the fourth quarter was $157.7 million, with HealthSpring’s acquisition of Bravo Health winning biggest venture-backed deal in the quarter. (It was apparently a win for investors, too. Bravo Health sold for $545 million. Backers including New Enterprise Associates and DLJ Merchant Banking Partners had sunk $157 million into the healthcare services company since its 1996 founding.)

PE-Backed Nycomed Buys China’s Techpool

Swiss drug maker Nycomed has acquired a majority stake in the Chinese pharmaceutical company Guangdong Techpool Bio-Pharma, Reuters reported. Nycomed paid roughly $210 million for a 51.34% stake in the Guangdong-based company. Zurich-based Nycomed is owned by four private equity firms: Nordic Capital, Credit Suisse’s DLJ Merchant Banking, Coller International Partners and New York-based Avista Capital Partners.

Demand Drives Up Industrial Multiples

All that dry powder is driving up multiples for industrial deals.

Before the go-go days of 2006, industrial firms were selling for 6.5x to 7.5x EBITDA. The credit-fueled buyout craze then caused multiples to surge to 8.5x to 9.5x EBITDA for industrial companies that were worth only 7x, before the credit crunch made multiples irrelevant (no deals, no multiples).

Today, PE firms are back shopping for deals and industrial companies are selling for inflated multiples, roughly 8.5x to 9.5x EBITDA, an East Coast private equity pro told me earlier today.

DLJ Merchant Banking Looks To Sell Total Safety

DLJ Merchant Banking Partners is prepping portfolio company Total Safety U.S. for a sale, multiple sources tell peHUB.

Before continuing, it is important to note that those sources do not include either DLJMB or Total Safety CEO David Fanta, who strenuously denied sale plans. “We’re owned by private equity, so obviously there will a deal at some point,” Fanta said. “But it’s not happening right now.”

So we have a case of “they said, they said.” Pretty typical, although on-the-record denials about such things are fairly unusual (we considered spiking the story, but then got independent confirmation from an additional source).

DLJ MB Remains In Holding Pattern as Industry Partners Bail

TowerBrook Capital Partners yesterday announced that it has partnered with John Janitz and Dom Schiano to explore investments in the industrial and related sectors.

The pair previously served as “industry partners” with DLJ Merchant Banking Partners, and remain listed on the DLJMB website. Also still listed is fellow industry partner Scott Marden, who left two months ago to join Compass Partners (along with a couple of principals).

All of this should serve as a reminder that DLJMB is nowhere near raising a new fund. It’s still investing out of a $2.1 billion vehicle that closed in Q3 2006, and which has less than $150 million left in uncommitted capital (following a recent $165m infusion info Swiss smart metering co. Landis+Gyr).

PE Debt Watch (Upgrades & Downgrades)

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies by Moody’s Investors Service Standard & Poor’s Ratings Services.

Company: Rafaella Apparel Group
Sponsor: Cerberus Capital Management LP
Action: S&P lowered its corporate credit rating on Rafaella to ‘CC’ from ‘CCC’ and its issue-level rating on the senior secured notes to ‘C’ from ‘CCC-‘.
Highlight: The company commenced a modified Dutch auction tender offer to purchase up to 51% of its outstanding 11.25% senior secured notes due 2011.

DLJ-Backed Pinnacle Gas Resources Sells to Investor Group

Pinnacle Gas Resources, a publicly traded energy company minority-owned by DLJ Merchant Banking Partners, has sold to an investor group which includes management and Scotia Waterous, part of Scotia Capital, for 34 cents a share. The company went public in 2007 for $9 per share. DLJ Merchant Banking has invested approximately $44 million into the company.

Where PE Went Wrong With MGM

If you can get past the annoying hedge fund mischaracterization, there are a few tidbits of useful info in this Defamer post about MGM. Author Edward Jay Epstein got his hands on the company’s sale memorandum and explains where its buyout barons (TPG, Providence Equity Partners, DLJ Merchant Banking Partners and Quadrangle Group) went wrong.

The main flaw in the LBO firms’ investment thesis, apparently, was its big bet on Blu-Ray. The firms took the gamble that DVD revenue would spike as people replaced their DVD players, and DVD collections, with high definition Blu-Ray players and collections.

That simply hasn’t happened, and MGM’s DVD revenues actually fell thanks to fewer new releases from the studio, a worldwide decrease in DVD sales, and “price erosion” caused by video piracy and services like Netflix and Redbox. In other words, TPG, Providence, and the others missed the macro-trend boat, big time.

Weekly Downgrade Wrap-Up

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from S&P and Moody’s Investors Service. This week was a busy one for downgrades and debt exchanges, with eight downgrades and one upgrade.

Company: Energy Future Holdings Corp.
Sponsor: Kohlberg Kravis Roberts & Co.
Action: S&P raised its corporate credit rating on EFH and its unregulated subsidiaries TCEH and EFCH to ‘B-‘ from ‘SD’ and assigned a ‘B–’ corporate credit rating to EFIH. This rating action follows EFH’s recent announcement that it and its subsidiaries have completed the exchange of its $357 million of various securities within the entire capital structure.
Highlight: “These ratings reflect EFH’s consolidated creditworthiness post-exchange.” The outlook on these corporate credit ratings is negative, reflecting weak financials and increasing refinance risk.

STR Holdings Prices IPO Below Range, Trades Higher

STR Holdings Inc., an Enfield, Conn.-based maker of solar power module encapsulants, raised $123 million in its IPO. The company priced 12.3 million common shares at $10 per share (below $13-$15 offering range), and closed its first day of trading at $13.10 per share. Credit Suisse and Goldman Sachs served as co-lead underwriters on the IPO. […]

STR Holdings Sets IPO Terms

STR Holdings Inc., an Enfield, Conn.-based maker of solar power module encapsulants, has set its IPO terms to 12.3 million common shares being offered at between $13 and $15 per share. It would have an initial market cap of approximately $620 million, were it to price at the high end of its range. The company […]

Weekly Downgrade Wrap-Up

As usual, we have a week’s worth of ratings actions on the debt of sponsor-backed companies via Standard & Poor’s Investors Service and Moody’s Investor Services.

Last week was Carlyle Week, with three of the firm’s companies receiving downgrades on their debt ratings. This week it’s Castle Harlan week. Two of the firm’s companies caught the attention of the ratings agencies this week, receiving one downgrade and one upgrade. We’ll call it a break-even.

Perkins & Marie Callender’s, the company’s struggling restaurant business, saw the ratings on its speculative grade debt downgraded on concerns over the company’s cash flow and borrowing ability. Conversely, Ames True Temper climbed its’s way out of the C’s when S&P upgraded its corporate credit rating to B- on its stable operating performance through the recession.

The timing is perfect, considering Castle Harlan’s John Castle recently addressed the New York Chamber of Commerce about “Private equity after the world’s economic meltdown.” We’ve published the full text of his speech here.

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