Goldman Sachs’ private equity funds will pay up to $291.6 million for a 19.9% stake in Enstar Group, company that invests in insurance and reinsurance companies and portfolios, Reuters reported. GS Capital Partners has invested $110.2 million to date in Enstar. The funds plan to invest additional money, following approval by regulators and Enstar shareholders, Reuters reported. Bermuda-based Enstar focuses on companies and portfolios that are no longer writing new policies, known as being in “run off.”Continue
(This story first appeared in Buyouts magazine, a peHUB sister publication.-Ed.)
The largest buyout of all time is fast becoming an embarrassment for its investors and for the private equity industry as a whole.
In the latest development, Energy Future Holdings Co. said on April 1 that it was negotiating a deal with creditors that could give it more time to pay back $20 billion of its debt.
The development is the latest fissure in what increasingly looks like a gargantuan failure for the Texas utility’s sponsors, led by Kohlberg Kravis Roberts & Co., TPG Capital and Goldman Sachs’s buyout arm. The PE firms bought the Dallas-based energy company, formerly known as TXU, for around $45 billion in 2007. (The utility still does business under the TXU brand, among others.)
Perhaps more importantly, the company’s struggles come atContinue
It’s been awhile since I’ve posted anything on the payout parade.
Well, today’s is a good one. ARAMARK, which provides food services to stadiums and arenas, is issuing $600 million in notes via a private placement. ARAMARK plans to use proceeds from the offering, along with proceeds it receives from borrowings under a revolving credit facility, to pay a dividend to ARAMARK stockholders.Continue
Private equity firms Clayton, Dubilier & Rice, and GS Capital Partners just closed their acquisition of HGI Holding, a Cleveland-based medical supplies distributor for an undisclosed amount of funding. Back in July, a source told the Wall Street Journal that the purchase price was $850 million. PRESS RELEASE: HGI is a leading mail-order, direct-to-home provider […]Continue
THL Partners has completed the sale of its majority stake in food supplier Michael Foods to GS Capital Partners for $1.7 billion. THL, which acquired the company in 2003, has retained a 20% ownership position.Continue
FRANKFURT (Reuters) – The owners of Cognis have launched a fresh campaign to sell the German maker of additives for cosmetics and detergents outright even as the firm prepares to go public, sources said. Permira and co-owner Goldman Sachs Capital Partners (GS.N), who turned down takeover offers as too low in 2006, are hoping to woo […]Continue
Goldman Sachs Capital Partners has agreed to acquire a 9.4% stake in Indian insurance and healthcare conglomerate Max India (BO: MAXI), for a rupee equivalent of around $115 million. www.gs.comContinue
The market, when it comes back, to the largest customer, there will be $5 billion purchases… They won’t be larger than that. Leverage will be, at most, one to one or one and a half to one, so the equity needed still will be larger than many firms want to do.
-Richard Friedman, Head of Merchant Banking at Goldman Sachs, on the maximum deal size going forward, and the continuing need for club deals and co-investmentsContinue
As usual, we have a week’s worth of ratings actions on buyout-backed companies from ratings agencies Standard & Poor’s and Moody’s Investor Services.
This week there were two appearances by downgrade regular Apollo Management, and two from GS Capital Partners. Bruckmann Rosser Sherrill’s Lazy Days RV saw its ratings withdrawn for unspecified reasons (although such a move usually occurs at the company’s request). Lastly, remember that Six Flags, which filed for Chapter 11 bankruptcy protection, is minority owned by Generation Partners. So there’s that.
Company: USI Holding Corp
Sponsor: GS Capital Partners
Downgrade: S&P has assigned a ‘B-‘ rating to the company’s proposed $117 million senior secured term loan and downgraded its existing senior secured credit one notch to ‘B-‘.
Highlights: “Our expectations for 2009 incorporated into the current rating level are that the company will have positive cash flow and will be able to meet its restrictive covenants in the near to medium term.”
Yesterday’s big private equity news was that GS Capital Partners, the PE arm of Goldman Sachs, wants to reallocate half of its remaining dry powder toward stressed and distressed debt opportunities (mostly debt). There is around $9 billion left in the firm’s six fund – of an original $20 billion stash – so we’re talking real money here. Three quick thoughts after the jump…Continue
GS Capital Partners is making a plea to its LPs, and it doesn’t have the support of the largest one—itself.
GSCP, a private equity arm of Goldman Sachs, is seeking approval from 50% of its investors to use money from its buyout fund to purchase distressed debt. But a whopping $9 billion of the firm’s $20 billion sixth fund came from Goldman Sachs itself — including contributions from employees — and those stakeholders do not get to vote on matters such as strategy change, according to the LP agreement.Continue
Remember when PE firms backed out of signed deals in droves? They looked like jerks at the time, but in retrospect, they were probably smart to avoid the overpriced, highly leveraged deals they had aggressively pursued for the past three years.
Taking into account the Dow’s record breaking drops last year, and assuming that a company’s stock price reflects its health, let’s look at the stock performance of 2008’s busted take-private targets and recoil at the premiums PE firms might have paid.Continue
Mergermarket is reporting that TPG and GS Capital Partners have expressed interest in acquiring Sprint Nextel’s iDEN network. It’s estimated worth is between $5 billion and $6 billion, the M&A news service said.
According to Thomson Reuters data, it’d be the second largest US private equity deal announced this year. (The largest is Lone Star Funds’ $6.7 billion deal for Merrill Lynch’s CDO mortgage assets.)
Coming from TPG’s position of winning the Worst Deal in PE History last week, I’m hopeful the firm has changed its mind. Particularly after the story quotes an analyst calling iDEN’s technology “antiquated” and also fully integrated with Sprint’s billing and back office operations.
Some background: iDEN is a wireless network Sprint got when it acquired Nextel in 2005. TPG and GS do make sense as bidders considering they own Alltel. Lastly, one of the firms (or are they working together? It’s not clear…) is partnering with former Nextel CEO Tim Donahue, the report states. That all seems to bode well, but I’m doubtful TPG LPs would want to get behind another big gamble.Continue