Private Equity
2 min read · 22 May 2009
2 min read · 22 May 2009
As usual, we have a week’s worth of ratings actions on the debt of buyout-backed companies from Standard & Poor’s and Moody’s Investor Services. These lists have lately become a more of a "limited default" roundup, as such LD and "selective default" ratings actions have dominated them. For the uninitiated, this happens when a company either negotiates for an amendment or covenant relief on its debt, or undergoes a distressed debt exchange. Moody's and S&P both view such moves as tantamount to default, since the debt in its original terms will not be repaid. If a company's lenders are nice, the business emerges from these situations with an improved rating on its facilities. If not, the company will likely file for bankruptcy or take a capital infusion from its sponsor. Unfortunately this is just the beginning, as the "rush to deleverage" the boomtime debt hangover will continue well into 2014. Even last year distressed debt exchanges reached almost $30 billion, up from $15 billion in the previous 24 years combined, according to Reuters.
4 min read · 22 May 2009
Blackstone Group is the first and only private equity firm ever to land a ranking of "most desired place to work" in Universum's annual MBA survey. The honor comes at a real seachange of MBA desires. Last year, despite massive layoffs in the financial sector, MBAs still wanted to work at the big investment banks like Goldman Sachs and Morgan Stanley. Now a bank holding company, Goldman Sachs is still there this year (number four), but it was a lone wolf, nestled between corporations and consulting firms: Google, Apple, Disney, Nike, Bain & Co., McKinsey & Co., and BCG. Then we have Blackstone Group, clocking in at number 11. More MBA students want to work for a public private equity firm that's watched its stock lose well over half of its value since its debut and laid off at least 10% of its staff than want to for Microsoft, P&G, Credit Suisse or GE. Impressive, Steve. Compared to certain financial companies that were conspicuously absent this year,
1 min read · 21 May 2009
Reprinted with permission from Reuters Dealzone. By Paritosh Bansal Some people thought Florida lender BankUnited would be sold months ago as regulators fretted over its health amid the housing downturn. The Federal Deposit Insurance Corp tends to take over banks on Fridays as it gives them the weekend to put an institution’s business in order and re-open it under new management by Monday. So the question was, is this the Friday? The government has given BankUnited some leeway to try to work out a deal. That flexibility may be because the bank has some $13 billion of assets, and disposing of a bank that big could result in a real hit to the FDIC’s insurance fund, Raymond James analyst Michael Rose told Reuters in February.
1 min read · 21 May 2009
Break It Down: The Deal Professor sees "Shades of Revlon" in the Vista/Accel-KKR feud for SumTotal. (Dealbook) Marc Cuban: On how Twitter and Facebook are competing with Google. (Blog Maverick) Titles: The Telegraph calls Lynn Fordham, newly appointed as the head of SVG Capital, the "first lady" of private equity. (Telegraph) TUI? A Morgan Stanley trader has been suspended after "trading under the influence." (Deal Journal) YES 09! IPOs have made money for investors this year. (Bespoke Investment Group)
1 min read · 21 May 2009
Speaking of dividend recaps. PNC Equity Partners has taken a recap on portfolio company Griffith Energy to the tune of 1.5x its investment, according to a source familiar with the situation. Manufacturers and Traders Trust Company led the arrangement of the senior debt facility. JPMorgan, HSBC and TriState Capital Bank also participated. The deal leaves the company with slightly debt than before, very roughly in the range of a 2x debt to Ebitda ratio. PNC purchased Griffith Energy, a New York-based propane and heating oil distributor, five years ago. Between then and now the firm has worked to upgrade IT infrastructure, integrate several tuck-in acquisitions, and change the pay structure for drivers and consolidate the company’s field office locations.
1 min read · 20 May 2009
It always looks bad when a buyout-backed company collapses under its debt load. It looks even worse when that buyout firm has already made a profit on the company. That's what happened today with structured settlement company J.G. Wentworth, which filed for Chapter 11 this morning. Private equity firm JLL Partners bought the company in 2005. Since then, it's profited handsomely on the investment. From Buyouts: The shop has taken out 2x its initial investment through two recapitalizations, and over the summer it sold $145 million worth of equity on a private exchange run by Bear Stearns. The private placement paid off J.G. Wentworth's second-lien debt and valued JLL Partners's remaining equity position at $450 million, generating a 6.1x return on its original $125 million investment, Rodriguez said.
2 min read · 20 May 2009
Guest Appearance: THL Partners' Scott Sperling wrote an op-ed in today's Wall Street Journal. He argues that Obama's approach to the auto industry is not anti-capitalist. (WSJ) Open Mouth, Insert Foot: J.C. Flowers' "Impolitic Words" may haunt private equity's bids for banks. (Dealbook) Ideal Employer Is No Employer? Universum's annual college grad survey has some interesting things to say about the attitude of recent grads--Less than 60% of undergraduates have bothered to look for employment. (BusinessWeek) Real Estate: Dick Fuld is looking to earn 50% on the sale of his co-op. (Business Insider)
1 min read · 20 May 2009
Flagrantly Thumbing His Nose: Steve Rattner's "lavish, $15 million summer home in the Lambert's Cove area of West Tisbury on Martha's Vineyard" is causing a furor with his neighbors, apparently. (New York Post) Mixed Metaphors: Peter Lattman agrees with me that private equity firms use way too many metaphors. Or maybe they just spend too much time talking about themselves. (Deal Journal) Annex Angst: LPs don't like annex funds. Understandably so. (The Deal) WSJ Weekend Headlines: Silicon Valley is Girding for a new Antitrust Regime and A Private Equity Bid for BankUnited is key for the future of buyouts in banking.
1 min read · 18 May 2009
