Private Equity
Culled from regulatory filings, here are some recent private equity and venture fundraising updates. Centerbridge Partners, the secretive buyout firm that joined some of the largest firms in their buyout of BankUnited, has raised $467.1 million for a fund called Centerbridge Special Credit Partners LP. Based in New York City, the firm is run by Jeffrey Aronson and Mark Gallogly. The firm's first buyout fund, called Centerbridge Partners LP, closed in 2006 with an undisclosed size. The firm's latest special credit fund has 37 investors and is using Park Hill as a placement agent. The target is not disclosed. Domain Associates, a venture firm based in Princeton, N. J., has raised $371 million toward an indefinite target for its eighth fund, Domain Partners VIII LP. The firm invests in emerging life sciences companies. http://www.domainvc.com/ Pathway Capital Management, a private equity fund of funds based in Irving, Calif., has raised $290 million from 12 investors for its 2008 fund, which has a $500 million target. The fund, called Pathway Private Equity Fund 2008 LP, commits to funds that have an average size of $300 million. http://www.pathwaycapital.com/
2 min read · 22 June 2009
The first two quarters of this year witnessed 46 bankruptcy filings from companies backed by private equity firms. That places 2009 on pace to double last year's total of 49, which is right in line with some predictions from the end of last year. Download the full spreadsheet after the jump. A few notes on the list this quarter: 1. The second quarter list includes our first mega-buyout bankruptcies: Extended Stay Inc., backed by Lightstone Group, and Chrysler, backed of course by Cerberus Capital Management. These deals could be the tip of the mega-bust iceberg, but I think most would agree that they're isolated incidents. We're still waiting, with bated breath, for 2011, when the real flood of mega-buyout debt begins to mature. Until then, the mega-market bankruptcies (ones with deal values greater than $5 billion) will be limited to the most underperforming companies with the most ridiculous capital structures.
3 min read · 22 June 2009
Here's a look at the past week's scoops, opinions and analysis from the peHUB blogging team. Social Networking Startup May Become Black Eye for High-Profile Valley Investors Tagged CEO Greg Tseng On Accountability, TechCrunch and Leading the Third Biggest Social Networking Site in the U.S. SoftBank's Hippeau Joins HuffPo...It Was Inevitable National Association of Realtors Forms VC Fund When VC Paul Holland Builds a House, He Doesn't Mess Around Unithrive: Connecting Cash-Strapped Harvard Students with Wealthy Alumni New Startup: VocabSushi LogMeIn Could Become First Tech IPO of Third Quarter What Up, Canada? Must-Read Tribute to Rajeev Motwani, One Week After His Fatal Accident Study: If You're Over 25 and a Tech Geek, You're Probably Using an iPhone Billionaire CEO Larry Ellison Cleared in Securities Suit Thompson's Statement Was A Bunch Of Bull Is Private Equity Poised For A Quick Bounce-Back? Fundraising Updates: Resource Capital, Richardson, Walton St. Picking Up After "Large Loan" Verrone Kind Of A Big Deal: ZM Capital Strikes First Deal With "Father Of Infomercials" A Modest Proposal LPs Say "No Mas" To Future Funds, But What About Existing Ones? Ford Foundation Names New Private Equity Chief Dollar General IPO Speculation Reaching Feverish Levels How Will Tomorrow's Financial Regulation Announcements Affect Private Equity? Private Equity and Venture Capital To Be Regulated PEC Supports Obama Plan For SEC Registration Underperform in Europe, and Heads Roll. In The U.S.? Business As Usual Steve Young of Huntsman Gay on Deploying a New Fund In a Slow Market 5 Eddie Bauer Questions for Jonathan Lynch Sun Capital and Golden Gate, Here's Your Second Shot at Eddie Bauer Lynn Tilton of Patriarch Partners on Speigel, AriZona Iced Tea, Not-Bankrupt Stila Cosmetics, and a Possible New Fund Thanks, Sale-Leaseback! Arcapita Takes 2x Return on Church's Chicken Midweek M&A Madness Weekly Downgrade Wrap-Up: Where Does Portfolio Company Debt Stand? Inside the startup office from hell Things A VC will never say Things a founder will never say The largest bankruptcies in history Former Management Buyouts Bill Clinton for Fed Chairman? Ten Ways to Provoke a Geek Argument Does VC post systemic risk? Social networking for quant traders Private equity is pretty dedicated to maintaining offshore abuse by private equity The Human Gulf in Private Equity Secondaries
2 min read · 19 June 2009
Happy Weekend! Keep On Rockin' Through The Layoffs: A cover band comprised of several laid off Credit Suisse bankers is "kept together by the music." Aged Inventory, the band's name, refers to a bond that sits in a trading book for more than 60 days. (Bloomberg) Private Equity Should Stay Away From Showbiz: Providence Equity Partners' MGM stake and Goldman Sachs' investment in the Weinstein Co. are reminders that betting on movies is a treacherous business. (BW) BDC Mess: American Capital's shares surged yesterday, and LBOWire isn't sure why. I suspect it had something to do with a rumour floating around about a "secret" meeting between the company and its lenders. There was little further info on the situation, but people will trade on anything. (LBOWire) Walking The Walk: Despite years of touting "operational expertise," it appears that buyout firms are finally walking that walk. (CNBC) From Phys. Ed. to PE: An interview with Adam Dudley of Grace Capital, which is seeking another partner. (Venture Hype) Why The OTS elimination shouldn't cause many tears: Fortune Swallows the Banks' Baloney (Columbia Journalism Review)
2 min read · 19 June 2009
As usual, we have a week’s worth of ratings actions on buyout-backed companies from ratings agencies Standard & Poor’s and Moody’s Investor Services. This week there were two appearances by downgrade regular Apollo Management, and two from GS Capital Partners. Bruckmann Rosser Sherrill’s Lazy Days RV saw its ratings withdrawn for unspecified reasons (although such a move usually occurs at the company’s request). Lastly, remember that Six Flags, which filed for Chapter 11 bankruptcy protection, is minority owned by Generation Partners. So there’s that. Company: USI Holding Corp Sponsor: GS Capital Partners Downgrade: S&P has assigned a 'B-' rating to the company’s proposed $117 million senior secured term loan and downgraded its existing senior secured credit one notch to 'B-'. Highlights: “Our expectations for 2009 incorporated into the current rating level are that the company will have positive cash flow and will be able to meet its restrictive covenants in the near to medium term.”
3 min read · 19 June 2009
KaChing: Social networking for quant traders. (WSJ) Diligence Tip: Don't forget the gray hair. (Carried Interest) Ideas: Why not ban prepayment penalties on debt? (Rortybomb via Felix Salmon) Memes: It appears that Ahmandinejad is no good at Photoshop. (Boingboing) More Memes: Mildly humorous epitaphs for some of the larger bankruptcies of the year. (Reformed broker via Abnormal returns) S&P Off Scott-Free? Among the institutions not affected by the regulatory overhaul: The ratings agencies, accused of handing out oh-so-many AAA ratings. (Clusterstock)
1 min read · 18 June 2009
Lynn Tilton of Patriarch Partners has been all over the news lately. Her distressed buyout firm recently gave up on a battle to purchase Polaroid, bought the assets of Stila Cosmetics and became embroiled in a conflict over the shares of AriZona Iced Tea. Today Patriarch purchased Spiegel Brands, an online and catalog retailer selling apparel under the Spiegel, Newport News and Shape fx brands. The deal’s timing is uncanny, considering the company’s former sister business, Eddie Bauer, collapsed into bankruptcy just yesterday. Tilton said Patriarch isn’t likely to place a rival stalking horse bid on Eddie Bauer, which has agreed to be acquired by CCMP Capital for $202 million, because it’s too retail-oriented for the firm’s taste.
3 min read · 18 June 2009
As the weather (slowly) warms up, plenty of M&A bankers are hoping the market for deals will as well. We've noticed a few more targets coming to market in recent weeks and have compiled a list of some of those we've come across. Our sources are various news reports and the Buyouts "Seeking Buyers" list. The following companies (among many others) are either formally considering "strategic alternatives," reported to be on the block or are rumored to be in sales talks. For prior lists, see below, and send any additions my way. IPC Hodings, a reinsurer based in California, is now a target after shareholders rejected an offer from Max Capital Group. The rejection comes after Max Capital topped a bid from reinsurer Validus Holdings, which was started by Aqualine Capital. ReadyMix Inc. will pursue strategic alternatives for the company following indications of interest from suitors. The company retained Lincoln International to advise it.
4 min read · 18 June 2009
Selling a company for less than you bought it for is typically a sign defeat. But thanks to a lucrative sale-leaseback, that's not the case for Arcapita's sale of Church's Chicken to Friedman Fleischer & Lowe. The firm made 2x its money net of all carried interest and fees. News of the sale itself shouldn't be a surprise to peHUB readers, since we first reported it on June 8. However, we didn't have the exact math. So here's how Arcapita earned twice its investment: The firm purchased the southern food chain from parent company AFC Enterprises in 2003 for $390 million. Immediately the firm sold the company's real estate in a sale-leaseback transaction, making $162.5 million. That technically makes the "true price" $227.5 million. The firm put in $82 million in equity and Suntrust Robinson Humphrey provided $160 million of debt financing.
3 min read · 18 June 2009
Huntsman/Hexion Continues: Hell Hath No Fury Like a Target Scorned, via Thomson Reuters' Westlaw Business. Really? NYU Grads are living in tents now. "We have parents that could give us money to get an apartment," the NYU grad told The Post, "but it's nice to be independent." (NY Post) Workarounds: Almost two years into the worst financial calamity since the 1930s, companies are doing everything they can to reduce their indebtedness, selling record amounts of equity to pay back bonds and loans. (Bloomberg) Second Acts: The lead executive who loaded Lehman Brothers Holdings Inc. with toxic property investments, is part of a group chosen by Lehman to take over the bankrupt firm's real-estate private-equity arm. (WSJ) Signs of Recovery? Fewer hedge funds shuttered themselves in Q1 than in Q408. (Crain's) Joss Whedon is a hack: Ten Ways to Provoke a Geek Argument. (Wired) And Ten More. (Wired)
2 min read · 17 June 2009
