Private Equity
Mergermarket is reporting that TPG and GS Capital Partners have expressed interest in acquiring Sprint Nextel’s iDEN network. It’s estimated worth is between $5 billion and $6 billion, the M&A news service said. According to Thomson Reuters data, it’d be the second largest US private equity deal announced this year. (The largest is Lone Star Funds’ $6.7 billion deal for Merrill Lynch’s CDO mortgage assets.) Coming from TPG’s position of winning the Worst Deal in PE History last week, I’m hopeful the firm has changed its mind. Particularly after the story quotes an analyst calling iDEN’s technology “antiquated” and also fully integrated with Sprint’s billing and back office operations. Some background: iDEN is a wireless network Sprint got when it acquired Nextel in 2005. TPG and GS do make sense as bidders considering they own Alltel. Lastly, one of the firms (or are they working together? It’s not clear…) is partnering with former Nextel CEO Tim Donahue, the report states. That all seems to bode well, but I’m doubtful TPG LPs would want to get behind another big gamble.
1 min read · 29 September 2008
WSJ: The economy will certainly be on the table at tonight's presidential debate, despite it's slated foriegn policy focus. We know neither candidate is particularly amazing when it comes to economic topics, and we know that neither of them had much time to prepare on debating the economy. That could bode well for the stronger debater (McCain), or for the one seen as stronger on the economy (Obama). And for that, I am even more excited. FT Alphaville: Of course there is a religious group that saw this crisis coming a million years ago. Night of the Living PR disasters: In a further potential blow to Sun Capital and Cerberus, Mervyns (you know, their bankrupt portfolio company that they made money on) won approval to hire a forensic financial accountant to investigate whether Sun and Cerberus’s LBO of the company was the cause of its bankruptcy. Sun and Cerberus call the deal "overheated rhetoric and hyperbole" and “speculative,” LBO Wire reported. Personally I’m shocked they haven’t settled out of court somehow yet. Even if the bondholders (who are behind this suit) have no case, the bad press alone seems to be enough to want to make this all go away.
2 min read · 26 September 2008
Dealscape: Getting sarcastic are we? The Deal’s blog pokes fun at James Sprayregen of Goldman Sachs for stating what does seem like a blinding glimpse of the obvious: there are more retail bankruptcies to come. Ok, yes, it’s not revolutionary but cut the guy a break. Everything seems boring and echo-y after a week of headlines that scream “CRISIS!” “MELTDOWN!” and “GREAT DEPRESSION!” Not to mention, being redundant and right is far better than being riveting and wrong. Dealbook: More sarcasm! (Has the crisis turned us all bitter?) Here Dealbook cleverly notes that the “financial firm” CVS Caremark has been added to the no-short list. Just kidding! CVS Caremark isn’t a financial firm! (Hint: its not sarcasm if you point it out in the next sentence…) In other news, seriously, how are CVS, I.B.M, Medco Health, and other decidedly non-bank companies on the no-short list? CNN Money: GE slashing guidance? No bigs, there are bigger fish to fry, says Wall Street. Tech Confidential: Tipjoy raised a big $1 million.
2 min read · 25 September 2008
Prometheus Partners, a micro-cap buyout firm based in Atlanta, is nearing a close on its fourth little fund. I say little even though I don’t know the exact size, but judging by prior funds, this firm clings tightly to the term “micro.” Prometheus I was $20 million, Prometheus II was $45.5 million, and Prometheus III was $40 million. So I can’t imagine Prometheus IV going over $50 million. The firm seeks to do roll-ups or capitalize on fast-growing companies with enterprise values between $10 million and $30 million. Prometheus has a restaurant franchise focus, though it appears that Spanky’s Portable Services LLC has snuck its way into the firm’s portfolio. Siguler Guff is arranging to make the final commitment to Prometheus IV before it closes, a source said.
1 min read · 25 September 2008
It’s just about that time for Arlington Capital Partners. The firm is preparing to raise its third buyout fund, according to a source. Arlington hasn’t issued memorandums yet, but the unofficial target is in the ballpark of $700 million to $750 million. Arlington used UBS as its placement agent for prior funds, raising $452 million for its debut and $585 million for the follow-up. This time Arlington will use Credit Suisse, since its main man at UBS, Mark Bourgeois, departed for Lehman Brothers in March. Obviously the future of Lehman’s placement agent business is in flux, so Arsenal turned to CSFB.
1 min read · 25 September 2008
2 min read · 25 September 2008
Reuters: No one knows why Daimler wants to sell its remaining stake in Chrysler. Reading the press release from the original transaction, I can take one guess—there’s no more “upside” to “participate in.” Deal Professor: Is Deal Professor referencing a hip hop song from the movie Hustle & Flow? He writes “Its Hard Out There For Pimp Seller.” New York Post: Even Sarah Palin is getting in on the Great Depression echo chamber. But today Warren Buffet trumped everyone, comparing the economic crisis to Pearl Harbor. Infectious Greed: Get ready to start reading analysis about the credit crisis as its already happening! Thanks to this handy list of eleven business writers working on books about the ongoing economic crisis. Who knows how they'll end? I guess with the fast pace of today’s sensory-overload-ADD flow of information, there’s no such thing as letting things sink in before we pour over them with analysis….
2 min read · 24 September 2008
Alpine Investors, a San Francisco-based private equity firm, is marketing its fourth fund, sources familiar with the situation said. The effort has a $175 million target with a $205 million hard cap, a slight jump over Alpine’s last fund. Alpine Investors III closed in March 2007 with $125 million in commitments. The firm is not using a placement agent and expects to hold a first close on November 1, one source said.
1 min read · 24 September 2008
Writing about anything other than the bailout seems a bit “Otherwise, Mrs. Lincoln, how was the show?” Dealscape: I was under the impression that AIG assets were being sold as we speak. But apparently, since it’s owned by the government and all this week, it’s going to be a very public process. Starting next week, Dealscape writes. Bloomberg: The insurer has around $16 billion in real estate holdings, globally. Mergermarket: Results of an outsourcing survey say that call center outsourcing is out of vogue, finance and accounting outsourcing is hot.
1 min read · 23 September 2008
Seems the best way to get a deal done these days is to Do It Yourself. And by “It,” I mean the financing. Instead of relying on lenders or co-investors, firms are “in-sourcing” their deal finance. What better way to avoid dreaded contingencies, which these days, is a four letter word to the ears of sellers. Just look at the recent fundraisings of Sterling Partners and Insight Equity. Both firms raised side funds (one a co-invest, one a mezzanine) for the sole purpose of financing their own deals. It’s got the same flavor as the attractive one-stop shop lending we’ve seen from the likes of American Capital, GE and Allied’s Unitranche Fund, etc.
2 min read · 23 September 2008
