The Spiral: Must See Web TV

August 25, 2008

From Equity Private (Going Private), it’s a five-part (thus far) series entitled the Spiral. Ballsy and brilliant!

Part I – Those Vultures

Part II – Managing Directors Everywhere

Part III – On Stage

Part IV – Liquidation

Part V – The Board


Private Equity Buy-and-Builds Down After Record Year

August 24, 2008

2007 saw a record amount of private equity “buy-and-build” transactions both in terms of the number of deals as well as total value.  Much of this came in the second half of the year as firms diverted greater amounts of attention to companies already in their portfolio as the credit crunch set in.  However, competition and bankers seeking more advantageous debt terms have helped push down the market thus far in 2008.

According to Dealogic, through the first two quarters of this year, the value of add-on acquisitions by private equity groups totaled $9.6B, down substantially from a record $53.2B in the previous two quarters and $35.8B in the first half of 2007.  It’s also important to remember that bolt-ons increase when asset prices surge, which is not the case at the moment.  Plus, you can’t set records each and every year…a fact that is lost on many people.

PIPE Dreams in France: Private Investment in Public Entities Up 100% in 2008 for France

August 24, 2008

PIPE (Private Investment in Public Entities) deals are up 100% in France thus far in 2008, more than twice the number (five) as last year.  PIPEs represent a good way for firms to invest money in down markets as they they allow firms a flexible method for a healthy and quick return thanks to pricing discounts, short term liquidity options and creative structuring.  The smaller size of PIPEs allows companies to sell only enough shares to raise what cash they need and are comparable to small public offerings that are confidentially marketed to a limited number of institutional investors.

French PIPE deals this year include Colony and Eurazeo raising their stakes in hotel operator Accor to around 30% and AXA Private Equity’s 11.43% stake in electrical components company Carbone Lorraine.  Look for more PIPE deals from Mid-cap French private equity firms to continue at a high clip for the next year.

Apax Partners’ Jackie Reses on Presenting Financial Information During Due Diligence

August 23, 2008

Here’s a video clip of Apax Partners’ Jackie Reses concerning presenting financial information during due diligence:

Investor Likes and Dislikes From Apax Partners’ Jackie Reses

August 22, 2008

Here’s a quick video of Apax Partner’s Jacqueline Reses on investor likes and dislikes:

Private Equity Expanding Into Leveraged Loans; Moulton Offers Warning

August 21, 2008

According to Standard and Poor’s cash-rich Private Equity firms are expected to continue to buy up leveraged loans at a high pace.  Leading firms such as Apollo (who’s raising up to £1.1B to buy badly performing loans from European banks), Blackstone (who bought GSO Capital earlier this year), TPG (which has raised a distressed credit fund), Cinven (which recently acquired half of debt advisory and management firm Indicus Advisors), Carlyle (which closed it’s second distressed fund of $1.35B earlier this year) and others have gotten into the game recently at a much greater level than in the past.

After the credit crunch hit last year, the banks were left holding more than $200B of “hung” leveraged loans, which they underwrote on generous terms during the debt boom, and no where to move them.  Enter the private equity firms with many fresh off of fundraisings to take the debt off the bank’s hands.  However, not everyone (particularly John Moulton of Alchemy Partners), is under the mindset that this is a match made in heaven.  Amongst his reasons he points to the limited possibility of returns if a firm uses a fund designated for buyouts to buy up debt as any gain would be capped versus the unlimited upside return potential of equity.  Time will tell!

Cinven Looks to Raise New 8-10B Euro Fund

August 20, 2008

Pan-European buyout firm Cinven is looking to raise a new fund valued between 8-10B euros.  The new fund will be the firm’s fifth after raising a 6.5B euro fund in 2006 (at the time Europe’s largest).

Additionally Cinven has shaken up it’s partnership structure ahead of the fundraising.  This includes the retirement of co-founder Dick Munton, the departure of Gordon Moore, and the promotion of three senior investors to partner.