Dan Primack

PricewaterhouseCoopers has released its quarterly report on technology M&A within the U.S. The lead: As the first quarter of 2010 ended, the seeds of optimism that began to spread through the technology industry at the end of 2009 appeared to have firmly taken root. Record profits, renewed order backlogs, and a return to hiring pointed to a recovery that prompted industry analysts to revise their 2010 forecasts upward. Download the entire report here.

Last year we reported that Madison Dearborn Capital Partners was stuck at "just a tick above $4 billion," in its efforts to raise a sixth fund. Erin followed up in February, saying that a final close was expected by the end of April. Now comes word, via Dow Jones, that the final close has indeed occured with $4.1 billion in capital commitments. This is well below Madison Dearborn's original $10 billion target, and not even close to its revised $7.5 billion target. More importantly, it signals that the Chicago-based firm hasn't secured any significant new commitments in nearly a year (despite having hired Credit Suisse placement vet John Knutsen to succeed retired investor relations chief David Mosher).

A few months back, I asked you to participate in our bi-annual Dealmakers Survey, which is done in conjunction with the Association for Corporate Growth (ACG). We got over 680 responses, including GPs, bankers, lenders and LPs. The top-line results reflect increased optimism, which 85% of respondents expecting an increase in M&A activity over the next six months. They also said it’s a buyer’s market. For context, only 56% predicted increased M&A activity in the year-ago survey. Respondents said that healthcare and manufacturing/distribution would experience the most activity with 20% each, followed by financial services (13%) and technology (12%). Digging a bit deeper, business services is considered the sector with the best opportunities for future buyouts, while manufacturing/distribution will be best for distressed.

Sign of the good times? Reader’s Digest CEO Mary Berner sent out an email to U.S. employees on Monday, announcing that a 16-month “recession plan” would end, as scheduled, in July. That means the return of 401(k) matching, an end to unpaid shutdown days and a set-aside for merit increases. The plan was put into place when Reader’s Digest was still owned by private equity firm Ripplewood Holdings. It filed for Chapter 11 bankruptcy protection last August, before emerging earlier this year. Ripplewood was wiped out.

This week's video segment with Reuters Insider was about distressed debt investing, and the disconnect between increased fundraising and the expectation of declining returns (assuming continued economic strengthening). I didn't get a chance to explicitly address the latter, but would say that LPs too often are blinded by recent returns at the expense of objective prognostication. Think about all those VC funds raised in 2001. Or mega-buyout funds in 2008. Or the Red Sox paying nearly $8 million per year for Mike Cameron. Erin argued last week that part of current distressed fundraising success related to LP allocation issues, and I agree that plays a role. Anyway, get the video after the jump...

Mid-market lender Churchill Financial is about to get a new sponsor, peHUB has learned. Olympus Partners has signed an agreement to buy an equity stake in the group from current majority owner Irving Place Capital, which currently holds around a 70% position. Olympus also would partially repay existing Churchill lenders. Expect a significant haircut on the equity (which will include an earn-out that basically doubles the initial payment), and a lighter discount on the debt. There also is the possibility of Olympus pumping

The Dutch Private Equity and VC Association each years teams up with PwC for a survey on the state of Dutch private equity. You can read it here.

Jesse Rogers is leaving Golden Gate Capital, the San Francisco-based private equity firm he co-founded in 2000. The entire firm was notified earlier this week, with word then sent out to limited partners. No official comment yet from Golden Gate, but I hear that Rogers is "retiring" rather than leaving to invest elsewhere. His departure does not create any keyman troubles for Golden Gate, which raised $5.5 billion for its third fund in 2008, so long as another senior managing director doesn't also depart. Rogers was a keynote speaker at the Buyouts West event a few weeks back, but didn't give any indication that he was planning to leave either Golden Gate or the industry. Instead, he lauded his firm's decision to embrace an "evergreen" fund structure, and remarked that improving credit markets were creating lots of strong opportunities for mid-market investors.

Last month, Cerberus Capital announced an agreement to buy Boston-based hospital chain Caritas Christi for $830 million (including the assumption of pension obligations). It promised to maintain the company’s Catholic identity, which includes significant charitable contributions, and to not sell/shut any of the hospitals or take the company public for the first three years. My question isn’t about how Cerberus plans to turn the hospitals into for-profit institutions – there actually is a road map for that in Massachusetts, as evidenced by Vanguard's work on St. Vincent’s hospital in Worcester – but rather if that $830 million pricetag will stand.

Well, it's official: Palm will not go bankrupt. Nor will it be Palm for much longer. The troubled PDA maker today agreed to be acquired by HP for $1.2 billion, or $5.70 per share. That's a 23% premium to Palm's closing price today, and a 54% premium to where Palm was trading when I last wrote about its prospects. The technorati already is trying to figure out the strategic purpose of this deal, with early consensus being that HP wants Palm's well-regarded OS to serve as the basis for an upcoming tablet. I don't pretend to know, although that makes sense (HP certainly isn't looking to acquire the throngs of Pre owners because, well because there aren't throngs of Pre owners). What I can say, however, is that this deal is terrific news for Elevation Partners, the private equity firm that had invested more than 25% of its $1.8 billion debut fund into Palm. No one at Elevation is going to pretend this is a homerun, or even a single, but it certainly is a save.