Private equity pros, venture capitalists and others in the trade are optimistic that conditions will continue to improve for leveraged buyouts, M&A, and related transactions in the months ahead. According to the latest installment of the twice-yearly ACG-Thomson Reuters DealMakers Survey, nearly three-quarters of respondents (74%) anticipate a rise in M&A activity over the next six months. One in 10 predicts M&A activity will “increase significantly” from the previous six months, while 64% say it will “increase moderately.” That respondents see room for improvement is understandable. More than half of them (55%) characterize the current environment for M&A activity as only “fair.” Another 30% call it “good,” 5% “excellent,” 10% “poor.” Interestingly, nearly two-thirds (65%) call it a buyer’s market, and the same percentage believe the market favors strategic over private equity buyers.
Social networking company DigitalTown, which trades on the over-the-counter bulletin board, has sealed a $10 million financing agreement with Boston-based Auctus Private Equity. Under the terms of the financing, DigitalTown has the right to sell up to $10 million in company stock to Auctus over a three-year-period. Burnsville, Minn.-based DigitalTown is developing a national network of online communities for high school students, alumni and boosters.
Korea Exchange Bank’s labor union has filed suit to block the $4.1 billion sale of the bank to Hana Financial Group, Reuters reported. In the lawsuit, the union takes issue with a dividend that would be paid to U.S. private equity firm Lone Star, which owns the 51 percent stake in the bank, Reuters said. Lone Star paid $1.2 billion for its stake in 2003, and could earn up to $246 million in dividends, on top of the acquisition price.
European buyout shop EQT, investing through its EQT Greater China II fund, has acquired a 30% stake in Modern Metal & Precision Holdings Ltd., an aluminum die casting manufacturer in China. Financial terms of the deal were not released. Modern Metal co-founders will retain the majority stake in the company. EQT Partners has offices in Copenhagen, London, New York, and other major cities around the world.
Below is some insight from Lou Moelchert, the founder of Private Advisors LLC, on the sale of 60 percent of the Richmond, Va.-based fund of funds to New York Life Investments. The firm's announced the deal Thursday. We'll have a broader story on the deal in the next issue of Buyouts. *In short, New York Life's investment provides more certainty to Private Advisors LPs, and it should be able to provide seed money for future products. Private Advisors had a few setbacks this year, namely in Europe, where it scrapped a fund of funds plan and lost a few executives. Firm co-founder Rafael Astruc also resigned earlier this year. "When you go through market periods that are as unsettled as last few years have been, this should give our LPs greater certainty," Moelchert said in a phone interview.
Encompass Digital Media, which is backed by Tennenbaum Capital, will pay $113 million for the content distribution business of Ascent Media Corp., Reuters reported. Macquarie Capital advised Encompass on the transaction, and is also providing financing along with Tennenbaum. The deal comes only a week after Ascent said it would sell its creative services and media services businesses to Deluxe Entertainment Services Group for $68 million.
Buyout shop H2 Equity Partners will buy a majority stake in electronics manufacturing technology company Assembleon. The company is currently owned by Royal Philips Electronics. Financial terms of the acquisition were not released. H2 Equity Partners was founded in 1991, and has offices in Amsterdam, Munich and London.
New York-based Sterling Infosystems, which provides employment and background screening services, has inked an undisclosed amount of financing from middle-market private equity shop Calera Capital. The companies did not disclose the size of Calera’s stake in Sterling. Paul Walsh, a Calera partner, will join Sterling as board chairman. Calera’s Mark Williamson and Michael Moon will also serve as directors. Sterling’s current chief executive and president will continue to lead the company.
New York-based private equity firm Apollo Management is in talks to buy hair salon chain Regis Corp., Reuters reported, citing an article in the New York Post. Minneapolis-based Regis owns or franchises more than 12,700 hair salons around the world.
World Kitchen, which is backed by Oaktree Capital Management and W Capital, said Thursday that it has agreed to buy Snapware Corp. Financial terms were not announced. Mira Loma, Calif.-based Snapware provides storage and organization products for the home and kitchen under brands like Snapware, Snap 'N Stack, and GlassLock. Rosemont, Ill.-based World Kitchen makes and market bakeware, dinnerware and kitchen tools under such brands as Pyrex, Corelle, Corningware and EKCO. BMO Capital Markets advised World Kitchen while Robert W. Baird & Co. servced as financial advisor to Snapware.