PEC (Bitterly) Calls "Leverage" On Kraft
Even though some are calling Kraft's deal for Cadbury a sweet one, to private equity firms, it tastes like sour grapes. In light of Kraft's generous use of leverage, the Private Equity Council, a PE advocacy group, released an analysis that can best be described as a vindictive "toldja so." And they're right, and they did tell us so, but still. The PEC's research that shows Kraft, a strategic buyer, will use more leverage (gasp!) on its deal for Cadbury than private equity did in the boom-era. For shame! According to the PEC, Kraft's leverage ratio is 24% higher than the average debt-to-cash flow ratio for large buyout deals between 2005 and 2008. The Counsel said:
21 January 2010•2 mins read
