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Market wrap up: Pine Brook closes first fundBuyout and mezzanine firms nationwide have now raised $18.5B in capital pledges
- Q&A With Rosetta Stone Investors on PE Education Plays (Hint: They Might Be Done For)
Following my post ../../../../../../37388/what-recession-abs-capital-is-cashing-in-on-education/ this morning on ABS Capital's partial exit of Rosetta Stone, I spoke with Phil Clough of ABS Capital. He said private equity activity in the education sector, which has proven to be wildly successful for his firm, is getting a bit overheated. It's a curious thing to say; Rosetta Stone's debut traded up more than 40% today, and Bridgepoint Education, another for-profit education company backed by Warburg Pincus, traded up in its debut this week as well. The pair of IPOs are the first PE-backed offerings of the year and mark the first time the markets have seen two IPOs in one week in 11 months. (For context, Thomson Reuters has published a chart showing http://financial.thomsonreuters.com/deo/pdf/04_16_09_Rosetta_Stone.pdf there was an average of 3.9 IPOs per week in 2007.) And it's not ABS Capital's first success in the sector. The firm made a killing on its offerings of American Public Education, which it floated for 17.1x its money in December. Prior to that, the firm made 2x its money selling CourseAdvisor Inc. to Washington Post after owning it for only a year. And as I reported earlier, ABS Capital is poised to make 6x its money on Rosetta Stone based on a $25 per share stock price. Even so, Clough said finding another home-run education deal in this market wouldn't be as easy.
- What Recession? ABS Capital Is Cashing In On Education
The education sector has been good to private equity this year, especially in the case of ABS Capital. The firm is poised to earn at least 6x its money on its investment of Rosetta Stone Inc., a foreign language learning software business. Yesterday the company priced its IPO at $18 a share, well above its expected range of $15 to $17. Today, the shares opened at an impressive $23 a share, and as of 11:00 a.m. they had risen above $25. /37386/rosetta-stone-shares-up-44-in-debut/ So let’s break down what that means for ABS Capital’s investment. The firm purchased Rosetta Stone with Norwest Equity Partners in 2006 for $62 million. ABS Capital put down $29 million in...
- peHUB Wire: Wednesday, April 15, 2009
Wednesday Warblings
- peHUB Wire: Wednesday, April 15, 2009
Wednesday Warblings
- Skype’s Been On the Block For Nine Months. That Means It’s Time to Leak
Two can play the game of press leaks. If you read between the lines of yesterday’s reports on eBay’s potential divestitures of Skype, it appears both sides of the deal might be using the media to influence pricing. Before I get into it, I want to mention that a private equity investor told me his firm first received the Skype pitch around nine months ago. The inquiry was led by Mark Dyne of Europlay Capital Advisors. You may remember that name from Skype’s initial sale to eBay—Dyne was a member of Skype’s board (he didn't return calls for comment). My source’s firm passed on the deal because Skype isn’t profitable, he said. The company’s profitability has been debated, but it had $550 million in revenues last year, according to its annual report. So, The New York Times broke the news http://www.nytimes.com/2009/04/11/technology/companies/11skype.html?_r=1&dbk reporting that Skype’s founders had been talking with private equity backers to help them buy the company back from eBay. The crucial pricing details are:
- peHUB Wire: Tuesday, April 14, 2009
Random Ramblings