Few word combinations could arouse more bearish skepticism than SPAC, auto industry, public markets, pre-revenue and Apollo Management (given peHUB's recent Apollo coverage). Yet we have Hughes Telematics, an automotive supply company facing a shareholder vote to merge with a SPAC. The SPAC's $700 million deal for Hughes Telematics was the largest of this year when it was announced in June. That was back when news headlines read "SPACs are Back," trumpeting the attractiveness of the special purpose acquisition vehicle. The deal worked in Apollo Management's favor: Three years ago Apollo had backed Hughes, a venture-stage maker of in-vehicle telematics technology, and would have laid the groundwork for an exit before the company was even profitable. Meanwhile Hughes would have the financing it needed to get over the revenue hurdle, allowing Apollo to continue to take part in the upside. Increased volatility in the public markets and massive hedge fund redemptions make it safe to say those days are over. Layer that with the increasingly global woes of the automotive industry, and it's safe to say Hughes Telematics faces an uphill battle to get its deal approved. Talking to the deal's leader, Polaris Acquisition Corp. head Marc Byron, and you can sense the nerves. "We are definitely facing headwinds," he said. Last month Byron, Apollo Management and Hughes restructured the deal for a lower value ($385 million). Yet Byron assured me, repeatedly, that he and Apollo Management are bullish on Hughes Telematics and really, really, really want the vote to go through. Apollo and Hughes Telematics' management and shareholders even agreed to hold their shares for a two-year lock-up period. The first earnout shares are unable to vest till the stock price hits $20 (its around $8.86 now). Byron needs to convince $105 million worth of Hughes' shareholders to believe in the story, which he is painting as "the one bright shining star out there in this economic mess." Here's why.
NEW YORK (Reuters) – Chesapeake Corp (CSKE.PK), a maker of paperboard and plastic packaging, has filed for Chapter 11 bankruptcy protection and plans to sell itself to a group of private equity firms, according to court documents. The Richmond, Virginia-based company said it could not keep up with interest payments on its debt as the […]
Energy Capital Partners has completed its sale of FirstLight Power Enterprises Inc. to SUEZ Energy North America for a reported $1.89 billion. FirstLight owns and operates 15 power generation plants, primarily storage and traditional hydro facilities in New England.
NEW YORK (Reuters) – DHP Holdings II Corp, parent of fireplace and heater maker Desa Heating, filed for Chapter 11 bankruptcy protection on Monday and said it would pursue an orderly wind down of its businesses, citing the sagging economy and credit crunch. The Bowling Green, Kentucky-based maker of indoor and outdoor heaters and garden electrical […]
PARIS (Reuters) – French women’s clothing company Morgan has gone into administration, a company spokesman said on Tuesday, as the global financial crisis continues to hit the luxury goods and retail sectors. Morgan employs 1,000 staff in total, with 750 of them based in France. The company said it was expecting a 9 percent fall […]
Odyssey Investment Partners has completed its take-private acquisition of SM&A, a Newport Beach, Calif.–based management consulting firm for procurement projects. The deal was valued at $119.6 million, or $6.25 per SM&A share. Caltius Mezzanine provided financing, while Wedbush Morgan Securities advised SM&A.
WASHINGTON(Reuters) – The Bush administration on Monday expanded its bailout of the U.S. auto industry, saying it was buying $5 billion in equity in auto and mortgage finance company GMAC and increasing a loan to General Motors (GM.N) by $1 billion. The action was the latest in a lengthy series of emergency government moves aimed […]
MUMBAI (Reuters) – Private equity firm Blackstone said on Tuesday it has taken a minority stake in unlisted Indian firm NSL Seeds for an undisclosed sum, marking its eighth deal in India. NSL Seeds is a hybrid seed company engaged in production and marketing of cotton seeds, rice, sunflower and pearl millet seeds, Blackstone said […]
BANGALORE (Reuters) – A host of private equity firms and global information technology majors are likely to vie for a stake in Satyam Computer Services, as angry investors look for an exit or a change in the Indian outsourcer’s management team. The embattled firm, which is also listed in New York, saw its shares plummet […]
(Reuters) – Entertainment Rights, home to children’s TV characters Basil Brush and Postman Pat, said on Monday it was in early stage talks over a possible bid for the company, as it also seeks to secure funding. The British firm declined to name its suitors. Earlier on Monday, the Daily Telegraph newspaper said Britain’s Hit […]