MELBOURNE (Reuters) – Private equity groups TPG and Carlyle have raised their bid for Australian hospital operator Healthscope (HSP.AX) slightly to A$1.8 billion ($1.5 billion) trying to woo the board. The bidders do not plan to split the group’s hospitals and pathology arms, an industry source said, deflecting speculation among analysts that the group could […]
NEW YORK (Reuters) – Barcalounger Corp, which began making reclining chairs in World War II, has filed for bankruptcy protection and agreed to sell its assets, citing a sales downturn that left it unable to survive. In a filing in the Wilmington, Delaware, bankruptcy court, Chief Restructuring Officer John Chapman said Barcalounger cannot generate enough […]
One of the sharpest snubs to the private equity industry during the credit crisis has been the FDIC's refusal to let private investors own banks outright. The more the agency tried to set boundaries for private equity acquisitions of banks, the more offense it caused. The FDIC improved the relationship somewhat over the past year, by reducing punitive leveraged ratio commitments and abandoning a cross-guarantee proposal. Still, its extensive pre-nuptial agreement showed that the agency remained distrustful and wary. A review was kicked off in March, and the results were flagged yesterday by Shasha Dai. Somehow, it turns out that the FDIC has put police tape around a favorite PE method of buying banks: Recapitalizing an existing bank and using it to make acquisitions in order to avoid the 10% leverage-ratio requirement and the three-year holding period. Rolling up a recapitalized bank would put PE firms under the thumb of the FDIC once more. Them's the breaks, right? Sorry, David Bonderman? Play again? Not so fast. The FDIC should be looking forward to a time when its options are running out, which won't be far in the future. The agency should examine why it's playing favorites with bank buyers as compared to private equity buyers. Consider, for instance, that there are very few banks who came through the credit crisis strong enough to buy rivals. Most of the others have terrible toxic assets, and the FDIC is spending a lot of its own money offering various guarantees and stock-sharing agreements trying to convince other banks to buy them.
maxIT Healthcare LLC, a Westfield, Ind.-based portfolio company of Riordan, Lewis & Haden Equity Partners, has merged with Parker, Colo.-based Ingenuity Solutions Group Inc. No finacial terms were disclosed. The combined company will provide healthcare ERP system solutions to the healthcare IT professional services market.
Kohlberg & Co. has sold U.S. Infrastructure Corp., a provider of outsourced sub-surface utility locating services in the U.S., to OMERS Private Equity. No financial terms were disclosed for the deal, which was managed by Harris Williams & Co.
LONDON (LONDN) – Private equity firm Cinven’s [CINV.UL] purchase of French medical diagnostics business Sebia is being financed with a 340 million euro loan provided by BNP Paribas, Citigroup and Commerzbank, the banks said on Wednesday.Cinven bought the business for around 800 million euros in mid-March from Montagu Private Equity using equity to finance the […]
CALGARY, Alberta (Reuters) – Marathon Oil Corp (MRO.N) said on Wednesday it will sell most of its refining and marketing assets in Minnesota to three private equity firms for more than $800 million as it streamlines operations during a period of weak profit margins at refineries. The integrated oil company has signed a nonbinding letter […]
Private equity's relationship with debt is something like Ebenezer Scrooge's relationship with the Ghost of Christmas Past, in that it may not be free of the dragging, clanking chains of low returns until firms stop loading companies with so much debt. Exhibit A: Private equity-backed IPOs are delivering dismal returns in their first month of trading, according to new reports from Bloomberg and Renaissance Capital:
"The 13 offerings by private-equity funds have fallen 2 percent in the first month of trading after averaging gains every year since at least 2001, according to data compiled by Bloomberg and Greenwich, Connecticut-based Renaissance Capital LLC. The IPOs have also lagged behind the Standard & Poor’s 500 Index, while companies without support from buyout firms have beaten the benchmark gauge for U.S. stocks by 5.8 percentage points after their initial sales."
The implications are obvious: PE firms need today's IPOs to produce strong enough returns to attract buyers for tomorrow's IPOs. Otherwise, options can become painfully limited for portfolio companies that need new capital in order to pay down debt (the active high-yield markets only provide a way to extend the debt maturities).
It’s become reflexive: Whenever a take-private buyout is announced, class-action law firms begin “investigating” whether the company’s board breached fiduciary duty to shareholders. Never mind if it was a competitive process that produced a 60% premium – suggest bad faith first and ask questions later. But at least these vultures typically wait until the deal is actually announced. Not so with a law firm called Bower Piven, which yesterday announced that it has “commenced an investigation into potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Pactiv Corp. in connection with the possible sale of Pactiv Corp. to Apollo Global Management LLC.” Note the operative word is “possible.” Neither Apollo nor Pactiv have announced anything! All we've got is a WSJ article saying that Apollo has offered to buy the company – at a price higher than where Pactiv has traded for the past several years. And today there are reports that strategic players are jumping into the fray.
Sun Capital Partners has acquired Captain D’s Seafood Kitchen, the nation's largest casual seafood restauirant chain. The seller was Sagittarius Brands, a portfolio company of Charlesbank Capital Partners. No financial terms were disclosed.