Private Equity
Welcome to the inadvertently longest Second Opinion links list of all time. The Private Equity Model Needs To Be Overhauled: "They are used to striding into offices, slashing costs and throwing out dead wood." (Telegraph) On the Other Hand: Wipeouts likely won't kill private equity (Breakingviews) But you already knew that. Advent's Purchase of Charlotte Russe: Is a big PR failure and probably a good first-deal lesson on the part of new buyout firm KarpReilly, founded by alumni of Apax Partners. (peHUB) You may remember the firm took a minority stake in the company and then made an unsolicited take-private offer last year (for around half of what Advent is paying, to boot). That offer happened to mentioned that the firm could make an even lower bid. It was rebuffed, and the shareholders later rejected the firm's attempt to get board seats as well. The firm eventually withdrew its bid. Read the history of that mess here. Postcards from the Hamptons: How is that vacation spot for the rich holding up? According to Dealbook, One restaurant manager said: "I think we're probably not seeing as much money being spent on really, really expensive wine," she said, "but people are still buying wine." (DB) Imagining a Profitable YouTube: "Google executives say that day is coming, but they've been vague about when." (SFGate) Lloyd Blankfein Goes Into Panic Mode: The Goldman Sachs bad press machine continues today with a hit piece on the firm's "trader huddles" in this mornings Wall Street Journal. Today CNBC talking head Charlie Gasparino wrote on the Daily Beast that "Wall Street CEO who considers himself a friend of the Goldman CEO" said Blankfein "looks like shit," these days. Tactful. Read about more of Blankfein's travails at Cityfile.
2 min read · 24 August 2009
If you were a company with increasing year-over-year losses in the midst of a recession, would you choose to emerge from bankruptcy with 9.1x leverage or with 3x leverage? Might not sound like much of a choice, but that's because you're not U.S. Shipping Partners, the long-haul marine transportation business once bestowed with the cursed Buyouts Deal of the Year Award. The company, which filed for bankruptcy in May, has actually chosen the 9.1x leverage option. Former owner Sterling Investment Partners lost its entire $40 million equity investment and has removed itself from the situation entirely.
2 min read · 24 August 2009
With its hiring of Debra Pederson, Carlyle Group is the latest in what's sure to be a trend of buyout houses bulking up their in-house fundraising teams. The move comes as the SEC has moved to ban venture and buyout funds from using placement agents to drum up commitments from public pension funds as a result of the recent "pay-to-play" scandal at the New York State Common Retirement. Carlyle Group became embroiled in the scandal through a fund it jointly operates with Riverstone LLC; as a result the firm announced it would cease to use placement agents as part of a code of conduct enforced by Andrew Cuomo. Even firms which are not fundraising may look to bulk up their investor relations team at a time when investors are cash-strapped and concerned about the performance of their investments in private
2 min read · 24 August 2009
Is the Sears cupboard bare? Lampert's Strategy Is Hobbling Sears. (WSJ) Cerberus Walkaway: Clients of Cerberus Capital Management's core hedge funds have opted to withdraw the majority of money from the funds, marking a sharp rebuke to the weakened firm and its boss Stephen Feinberg. (WSJ) Simply Nursery? Some Twitterspam is too priceless not to share. It seems this adorable toddler is interested in mergers & acquisitions. (Twitter) KKR In Japan: Kohlberg, Kravis, Roberts and Permira are vying to acquire Citigroup-owned BellSystem24, Japan's largest telemarketer, in a deal that would be one of the largest private equity investments in Japan this year. (FT) CLO Technique to Fund Private Equity Deals: Private equity firm Kidd & Co. has devised a novel securitization strategy that would finance investments in distressed-company debt. (Asset-Backed Alert)
1 min read · 21 August 2009
As usual, we have a weeks worth of ratings actions on the debt of buyout-backed companies from ratings agencies Moody’s and Standard & Poor’s. Dollar General got upgraded, CD&R's new deal got downgraded, and things are still ugly at Hexion. Company: Dollar General Corp. Sponsor: KKR Action: S&P placed its ratings, including the 'B+' corporate credit rating, on the company on CreditWatch with positive implications. Highlights: “The CreditWatch placement follows Dollar General's S-1 filing, under which it plans to sell $750 million in common stock. Dollar General plans to use a portion of the proceeds to repurchase a mix of its existing subordinated and senior unsecured notes, subject to a 35% equity clawback provision under these indentures. In addition to the common stock offering, Dollar General plans to pay a $200 million dividend to its equity sponsors with cash from operations.“
3 min read · 21 August 2009
The robust auction for Screenvison is heading into the final stages, according to a source close to the process. The cinema advertiser’s parent company, Thomson SA, announced in January that it would divest Screenvision, and also is selling Premier Retail Networks (PRN), which it purchased from Shamrock Capital Advisors in 2005 for $285 million (Shamrock did quite well on the deal, investing just $35 million from its first fund in 2001). UBS is running the auction process for Screenvision. The firm declined to comment. Based in New York, Screenvision runs an in-theater network of advertisers. In other words, they do those annoying ads you’re forced to endure before the movies. The company’s network focuses on independent theaters and has an Ebitda “in the ballpark” of $40 million.
2 min read · 21 August 2009
Yesterday Forbes released its annual "Most Powerful Women" list, which is different from its lists of highest paid CEOs, richest billionaires, and highest-paid celebrities. Those are all about money. But since even women with great responsibilities and influence are still paid less than men, we get our own get a special "Power" list. And by special I mean consolation. The list is determined, according to Forbes, not by "celebrity or popularity," but by influence. It should be determined by money, just like the other lists, but it's not a perfect world. Sadly, the world of finance has lost some of its most "Most Powerful Women" over the past few years-aside from FDIC Chairman Sheila Bair and FDIC Chairman Mary Shapiro, the list is dominated by CEOs and political figures.
2 min read · 21 August 2009
The Last Days of Lehman Brothers: The collapse of Wall Street bank Lehman Brothers is being dramatised by the BBC in a made-for-TV movie to be shown around October. (Reuters) Got the VC Model Backward? "While so many startups are groveling for funding, the founder and CEO of Paltalk, an online social video conferencing startup based in New York, decided to use its cash to buy back a major chunk of the company from a venture capital backer." (The Deal) South Park Meets Harvard Business School: Introducing California-based Singularity University, a new institution that aims to educate "a cadre of leaders" about the rapid pace of technology and to address humanity's grand challenges, such as climate and health. (FT) Matching Up Lenders With Borrowers: One solution to the credit crunch, which persists, particularly in the middle market, is the "minibond," Luke Johnson suggests. (FT) Silicon Valley Six: Want to know more about the most sought-after startups in Silicon Valley? Reuters has a breakdown of their backgrounds. (Reuters) What Does UBS Stand For: U Better Sing? Unreliable Bankers Swiss? A myriad of other examples from Barry Ritholtz. (The Big Picture)
1 min read · 20 August 2009
1 min read · 20 August 2009
PBM Products, a maker of private-label baby foods, is seeking to arrange for a buyout or partial sale of the company. The company, based in Gordonsville, Va., could garner as much as $1 billion. Jefferies & Co. is advising the company. (Read more) Good Times Restaurants Inc. (Nasdaq SmallCap: GTIM), a quick service restaurant chain based in Colorado, hired Mastodon Ventures, Inc. to provide strategic advisory services as it explores strategic alternatives. Bankrupt Metaldyne, based in Plymouth, Mich., is seeking a buyer for its Tubular Products Business, its Balance Shaft Module Business, and its Chassis operations. Revstone Industries LLC has been named the stalking horse bidder for the latter; Hephaestus Holdings has been named the stalking horse bidder for the Tubular Products and Balance Shaft Module businesses. The auction for the Travel Channel, run by Goldman Sachs, has received bids from Scripps Networks Interactive and General Electric Co's NBC Universal. (Read more) Tremont Group Holdings, a firm which operated Madoff feeder funds, has retained bank Duff & Phelps to run an auction for remaining hedge fund assets in the coming weeks. (Read more)
4 min read · 20 August 2009
