Private Equity
A few months back, I asked you to participate in our bi-annual Dealmakers Survey, which is done in conjunction with the Association for Corporate Growth (ACG). We got over 680 responses, including GPs, bankers, lenders and LPs. The top-line results reflect increased optimism, which 85% of respondents expecting an increase in M&A activity over the next six months. They also said it’s a buyer’s market. For context, only 56% predicted increased M&A activity in the year-ago survey. Respondents said that healthcare and manufacturing/distribution would experience the most activity with 20% each, followed by financial services (13%) and technology (12%). Digging a bit deeper, business services is considered the sector with the best opportunities for future buyouts, while manufacturing/distribution will be best for distressed.
2 min read · 05 May 2010
Sign of the good times? Reader’s Digest CEO Mary Berner sent out an email to U.S. employees on Monday, announcing that a 16-month “recession plan” would end, as scheduled, in July. That means the return of 401(k) matching, an end to unpaid shutdown days and a set-aside for merit increases. The plan was put into place when Reader’s Digest was still owned by private equity firm Ripplewood Holdings. It filed for Chapter 11 bankruptcy protection last August, before emerging earlier this year. Ripplewood was wiped out.
1 min read · 05 May 2010
It's been 13 years since Mitch Thrower helped launch The Active Network, an online community and application technology provider for the active lifestyle/sports market. Now he's back with Bump.com, a reverse communications platform that "allows consumers and companies to communicate with people and vehicles via unique identifiers." Thrower's new company so far has raised $1 million in seed funding, from Digimedia, Tal Kerret (chairman of Oberon Media), Christophe Vandaele (chairman of Vandaele Holdings), Charlie Baker (partner with DLA Piper), Bill Hein (former SVP at EMI) and Bob Ezrin (music producer). It also is in talks to raise a $6 million Series B round and has made an acquisition in the imaging technology space. "Bump is like AAA meets Facebook meets communications infrastructure," Thrower says. "Kind of like a national, social-networked 1-800-How's-My-Driving?"
3 min read · 04 May 2010
This week's video segment with Reuters Insider was about distressed debt investing, and the disconnect between increased fundraising and the expectation of declining returns (assuming continued economic strengthening). I didn't get a chance to explicitly address the latter, but would say that LPs too often are blinded by recent returns at the expense of objective prognostication. Think about all those VC funds raised in 2001. Or mega-buyout funds in 2008. Or the Red Sox paying nearly $8 million per year for Mike Cameron. Erin argued last week that part of current distressed fundraising success related to LP allocation issues, and I agree that plays a role. Anyway, get the video after the jump...
1 min read · 04 May 2010
Mid-market lender Churchill Financial is about to get a new sponsor, peHUB has learned. Olympus Partners has signed an agreement to buy an equity stake in the group from current majority owner Irving Place Capital, which currently holds around a 70% position. Olympus also would partially repay existing Churchill lenders. Expect a significant haircut on the equity (which will include an earn-out that basically doubles the initial payment), and a lighter discount on the debt. There also is the possibility of Olympus pumping
1 min read · 04 May 2010
The Dutch Private Equity and VC Association each years teams up with PwC for a survey on the state of Dutch private equity. You can read it here.
1 min read · 03 May 2010
Early stage investor raises $100M
1 min read · 03 May 2010
Jesse Rogers is leaving Golden Gate Capital, the San Francisco-based private equity firm he co-founded in 2000. The entire firm was notified earlier this week, with word then sent out to limited partners. No official comment yet from Golden Gate, but I hear that Rogers is "retiring" rather than leaving to invest elsewhere. His departure does not create any keyman troubles for Golden Gate, which raised $5.5 billion for its third fund in 2008, so long as another senior managing director doesn't also depart. Rogers was a keynote speaker at the Buyouts West event a few weeks back, but didn't give any indication that he was planning to leave either Golden Gate or the industry. Instead, he lauded his firm's decision to embrace an "evergreen" fund structure, and remarked that improving credit markets were creating lots of strong opportunities for mid-market investors.
1 min read · 30 April 2010
An OpenTable for takeout? That’s the new plan for Exit41, a Massachusetts-based company that has quietly raised $6 million in VC recap funding. New investors include GrandBanks Capital, Contour Venture Partners and Dace Ventures, while existing shareholder Fidelity Investments also participated (others, like Thomas Weisel Venture Partners, did not). The company was launched in 1998 as Elm Square Technologies, as point-of-sale enterprise software for restaurants and caterers to manage orders. It later changed its name to Exit41, and began supplying fast-food chains with technology that better enabled drive-thru ordering systems.
2 min read · 30 April 2010
Last month, Cerberus Capital announced an agreement to buy Boston-based hospital chain Caritas Christi for $830 million (including the assumption of pension obligations). It promised to maintain the company’s Catholic identity, which includes significant charitable contributions, and to not sell/shut any of the hospitals or take the company public for the first three years. My question isn’t about how Cerberus plans to turn the hospitals into for-profit institutions – there actually is a road map for that in Massachusetts, as evidenced by Vanguard's work on St. Vincent’s hospital in Worcester – but rather if that $830 million pricetag will stand.
2 min read · 30 April 2010
