Discount retailer Dollar General late this afternoon filed for its IPO, with a $750 million target and nine listed underwriters (including KKR -- so much for worries that it was trying to dis-intermediate Wall Street). We've been expecting this filing for a while, but that doesn't diminish its importance. Dollar General is a charter member of the buyout boom, getting taken private just 25 months ago by KKR for $7.2 billion. The deal included $2.8 billion in equity from KKR and its co-investors, which the firm recently said had been marked up to approximately $4.75 billion. In other words, this is considered one of the good ones. Part of this is basic counter-cyclicality. After all, what cash-strapped family doesn't want 18 rolls of Quilted Northern toilet paper for just $5? But KKR folks also argue
2 min read · 20 August 2009
Earlier this week, we reported that Berkshire Partners had quietly hired five new associates. The next day, Private Equity Insider wrote the following: Columbia University’s endowment is calling off a secondary-market offering of nearly $1 billion, after selling a sliver of the portfolio to Adams Street Partners. The Adams Street sale involved stakes in just three or four private equity funds run by Berkshire Partners and TA Associates — vehicles whose characteristics were on a “want list” maintained by the Chicago fund-of-funds specialist. I don't use these examples to show how someone else got a better scoop than peHUB (although they did), but rather because the rat-a-tat-tat got me to thinking about how long it had been since I'd heard Berkshire's name mentioned in any context. The Boston-based firm raised $3.1 billion for its seventh fund in 2006, but hasn't announced any new acquisitions since October 2007 (save for one PIPE and a pair of bolt-on acquisitions in February '08 and January '09). The only disclosed exit was a partial sale of its Party City retail chain (AMSCAN) to Advent International last fall. I know private equity is slow right now, but this is approaching Comcast turtle territory.
3 min read · 20 August 2009
Jim Moran today will be introduced as the newest partner with North Bridge Venture Partners, after most recently serving as CEO of NBVP portfolio company Covergence (sold to Acme Packet in May). So we’ve got 5 Questions for Jim, who is in the midst of relocating from Columbus, Ohio to the Boston ‘burbs. 1. You are a longtime entrepreneur and operating guy, with Covergence, eDocs, Virtusa and CheckFree. Why move over to the dark side of venture capital? I do hear people call it the dark side quite often. I gave it a lot of thought and, quite frankly, think that this is a great point in time to get into the venture business. Maybe around half of the funds out there right now are going to go away, and the venture economics are going to go back to
4 min read · 20 August 2009
In the panoply of scumbaggery, there's a special place reserved for four Chicago-area cemetery workers indicted earlier this month for digging up bodies in order to resell their grave-plots. The case has captivated and horrified the Midwest, and received national attention when it was believed that the desecrated corpses may have included that of civil rights-era lynching victim Emmett Till (his grave was not actually disturbed, but his original casket was found surrounded by garbage in a cemetery storage room). What has been mostly overlooked, however, is that the cemetery is managed by a company whose investors include at least two private equity firms: Pacesetter Capital Group (Richardson, Texas) and Milestone Growth Fund (Minneapolis). Both firms focus on small-cap, minority-owned businesses, and have received funding from the U.S. Small Business Administration. (Our database also includes investments from Opportunity Capital Partners and Banc of America Capital Investors, but it's unclear if either are still shareholders.)
2 min read · 19 August 2009
Before going on TV earlier today to discuss IPOs, I asked our data folks to run some aftermarket performance numbers. It was my sense that the typical 2009 IPO had performed well since pricing (and my certainty that most of them priced at the upper ends of their ranges), but I felt it best to be safe. Through market close yesterday, the average IPO'd company was trading at 23.1% higher than its initial offering price. This includes all 18 offerings that priced on U.S. exchanges, including foreign issuers like Avago. Venture-backed offerings did even better, trading at 38.1% above their initial offering price. This includes a negative figure for LogMeIn, which has quietly sunk since its first-day pop. You can download the data run here. Company-by-company listings are on the second sheet.
1 min read · 19 August 2009
Today is the five-year anniversary of Google's IPO, so I was on CNBC earlier this afternoon to discuss where the IPO market is today (short answer: speeding up from a standing start). Here's the vid, for your viewing pleasure:
1 min read · 19 August 2009
As some of you know, my first real journalism job was helping to launch and manage a youth-focused community newspaper based in Roxbury, Mass., which qualifies as part of Boston’s inner city (both geographically and figuratively). Small operation, which means a lot of my time was spent hustling for advertisers, which typically were local businesses. In all my conversations with these enterprising entrepreneurs, I never heard terms like “venture capital” or “growth capital.” I did, however, often hear the term “bank” with some sort of expletive preceding it. The problem, of course, was on both sides of the proverbial coin: The inner city businesses had no idea how to access the private capital markets, and the private capital markets paid to attention to inner city businesses.
2 min read · 19 August 2009
Discussing the Reader's Digest bankruptcy, with Carrie Lee in New York and me just a few paces from the suburban home office: Update: I made a misstatement in the video, in saying that Alpha Media and Vibe had filed for bankruptcy protection. Neither one has done so. Instead, both PE-backed companies were written off by their equity sponsors and were either recapped (Alpha) and/or sold (Vibe). Major apologies.
1 min read · 18 August 2009
KKR Private Equity Investors, the Amsterdam-listed affiliate of U.S. buyout firm KKR, earlier today released its Q2 earnings. Writeups for Dollar General and HCA. The earnings call will take place at 1pm ET this afternoon, and I'll live-blog it after the jump. I won't be able to ask any questions -- analysts and investors only, sniff -- but we can have a conversation amongst ourselves...
1 min read · 18 August 2009
"We also thank our sponsor Ripplewood Holdings, who has provided inspired vision and stewardship over the last two and a half years, including during this process." - Mary Berner, CEO of The Reader's Digest Association. This was part of today's announcement that Reader's Digest will file for Chapter 11 bankruptcy protection, to facilitate a debt restructuring that would wipe out Ripplewood's equity stake. Remember, it was just over two years ago that Ripplewood bought Reader's Digest just two years ago for $2.4 billion, and it originally wanted to pay about $150 million more (which likely would have resulted in even more debt). So I'm not sure if Berner was being ironic or was just the victim of some well-meaning -- but poor-thinking -- PR flack. Maybe she was just saying "Thanks for the paycheck," since Ripplewood installed her as CEO in the first place...
1 min read · 17 August 2009
