Erin Griffith

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 Bruckmann Rosser Sherrill’s Lazy Days RV saw its ratings withdrawn for unspecified reasons (although such a move usually occurs at the company’s request).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.”

KaChing: Social networking for quant traders. (WSJ) Diligence Tip: Don't forget the gray hair. (Carried Interest) Ideas: Why not ban prepayment penalties on debt? (Rortybomb via Felix Salmon) Memes: It appears that Ahmandinejad is no good at Photoshop. (Boingboing) More Memes: Mildly humorous epitaphs for some of the larger bankruptcies of the year. (Reformed broker via Abnormal returns) S&P Off Scott-Free? Among the institutions not affected by the regulatory overhaul: The ratings agencies, accused of handing out oh-so-many AAA ratings. (Clusterstock)

Lynn Tilton of Patriarch Partners has been all over the news lately. Her distressed buyout firm recently gave up on a battle to purchase Polaroid, bought the assets of Stila Cosmetics and became embroiled in a conflict over the shares of AriZona Iced Tea. Today Patriarch purchased Spiegel Brands, an online and catalog retailer selling apparel under the Spiegel, Newport News and Shape fx brands. The deal’s timing is uncanny, considering the company’s former sister business, Eddie Bauer, collapsed into bankruptcy just yesterday. Tilton said Patriarch isn’t likely to place a rival stalking horse bid on Eddie Bauer, which has agreed to be acquired by CCMP Capital for $202 million, because it’s too retail-oriented for the firm’s taste.

As the weather (slowly) warms up, plenty of M&A bankers are hoping the market for deals will as well. We've noticed a few more targets coming to market in recent weeks and have compiled a list of some of those we've come across. Our sources are various news reports and the Buyouts "Seeking Buyers" list. The following companies (among many others) are either formally considering "strategic alternatives," reported to be on the block or are rumored to be in sales talks. For prior lists, see below, and send any additions my way. IPC Hodings, a reinsurer based in California, is now a target after shareholders rejected an offer from Max Capital Group. The rejection comes after Max Capital topped a bid from reinsurer Validus Holdings, which was started by Aqualine Capital. ReadyMix Inc. will pursue strategic alternatives for the company following indications of interest from suitors. The company retained Lincoln International to advise it.

Selling a company for less than you bought it for is typically a sign defeat. But thanks to a lucrative sale-leaseback, that's not the case for Arcapita's sale of Church's Chicken to Friedman Fleischer & Lowe. The firm made 2x its money net of all carried interest and fees. News of the sale itself shouldn't be a surprise to peHUB readers, since we first reported it on June 8. However, we didn't have the exact math. So here's how Arcapita earned twice its investment: The firm purchased the southern food chain from parent company AFC Enterprises in 2003 for $390 million. Immediately the firm sold the company's real estate in a sale-leaseback transaction, making $162.5 million. That technically makes the "true price" $227.5 million. The firm put in $82 million in equity and Suntrust Robinson Humphrey provided $160 million of debt financing.

Huntsman/Hexion Continues: Hell Hath No Fury Like a Target Scorned, via Thomson Reuters' Westlaw Business. Really? NYU Grads are living in tents now. "We have parents that could give us money to get an apartment," the NYU grad told The Post, "but it's nice to be independent." (NY Post) Workarounds: Almost two years into the worst financial calamity since the 1930s, companies are doing everything they can to reduce their indebtedness, selling record amounts of equity to pay back bonds and loans. (Bloomberg) Second Acts: The lead executive who loaded Lehman Brothers Holdings Inc. with toxic property investments, is part of a group chosen by Lehman to take over the bankrupt firm's real-estate private-equity arm. (WSJ) Signs of Recovery? Fewer hedge funds shuttered themselves in Q1 than in Q408. (Crain's) Joss Whedon is a hack: Ten Ways to Provoke a Geek Argument. (Wired) And Ten More. (Wired)

Here’s a little timeline on Eddie Bauer, which filed for Chapter 11 bankruptcy protection a few hours ago: 2003: Eddie Bauer’s parent company, Spiegel Group, files for bankruptcy. 2005: Eddie Bauer becomes a publicly traded company. May 2006: Eddie Bauer puts itself up for sale. October 2006: Eddie Bauer is reported to receive a “below market” offer from Sun Capital and Golden Gate Capital, meaning the bid from the two firms was below its share price. November 2006: The company’s shares are driven down on news of the bid; Sun and Golden Gate agree on a deal at the same price (but no longer a “take-under”) for $614 million. February 2007: Eddie Bauer’s shareholders reject the agreed-upon deal. Sun Capital refuses to sweeten its offer. June 2009: Eddie Bauer loses money for nine quarters in a row. June 2009: Eddie Bauer files for bankruptcy. Again.* The company files with an agreement to sell to CCMP Capital Advisors for $202 million. Sun Capital and Golden Gate Capital have already done their diligence on Eddie Bauer. Could they plan a rival bid to CCMP?

ZM Capital got off to a false start last year, when its first deal as a solo shop -- a buyout of media services company Greenfield Online -- fell apart. But the firm, an investment subsidiary of ZelnickMedia, prevailed this week in its acquisition of Cannella Response Television, a Wisconsin-based broker of infomercial spots. ZM Capital brought in Palladium Equity Partners to share the equity load. The deal included no senior debt, but did have mezzanine notes and a small equity slice from VSS Structured Capital II (first investment from Veronis Suhler Stevenson’s second mezzanine fund). ZM Capital purchased the privately-owned company from its founder Frank Cannella, who is credited with being “The Father of the Infomercial Industry,” according to ZM Capital’s Andrew Vogel. Management, which includes Cannella and CEO Robert Medved, has retained a significant stake. Petsky Prunier advised the seller on the transaction. Pricing terms weren't disclosed.

The Private Equity Council has issued a statement in support of President Obama’s proposed plan for new financial regulation, which includes requiring private equity firms to register with the SEC. The advocacy group’s support backhandedly mentions such registration is unnecessary since “private equity firms do not create systemic risk,” but basically admits that all in […]

Intervention: The US State Department has asked Twitter not to undergo its planned service upgrade during the daytime hours in Tehran, and Twitter decided to delay the upgrade. (Reuters) Wall Street Gets Poetic: A hedge funder has penned a poem titled, "Green Shoots." Read it at Deal Journal. Is the SEIU To Blame? The villain in the remake of "The Taking of Pelham 123" is a private equity pro! It's a change from the original 70s version, since private equity wasn't exactly around then. (Dow Jones) Queens University B-School: Looking for more team players less divas. (BusinessWeek) Remember MBOs? What about FMBOs (Former Management Buyouts)? The former CEO of Children's Place Ezra Dabah (ousted in 2007 because of violating conduct codes) is still trying to buy the company. What about the children? (Dealbook)