STABLE GROWTH

Michelle Greene, an equestrian for many years, is a college student who competes on New York University's equestrian team and works at Manhattan Saddlery, a “tack shop” in Manhattan. From boots to breeches and from belts to bags, Greene knows quality riding gear.

On a Monday afternoon in late November, Greene eagerly gave a tour of the boots and other products that Manhattan Saddlery carries. Products she consistently recommends are those of Ariat International, a producer of equestrian footwear, accessories and apparel based in Union City, California.

“They're very popular,” Greene says of the Ariat products. “They're our best-selling stuff.”

Ariat's popularity did not escape the notice of LNK partners, a private equity firm based in White Plains, New York which, with a $61 million (€48 million) investment from its $400 million debut fund, LNK Partners, led a recapitalisation of Ariat in November. Los Angeles, California-based private equity firm Brentwood Associates co-invested on undisclosed amount.

“We were attracted to the team and to the brand,” says David Landau, who co-founded LNK with Henry Nasella in 2005. “It's a good business. It's a sizeable business. It's particularly sizeable in the US.” Above all, Landau emphasises that Ariat has shown stable growth.

A sizeable consumer population exists for Ariat's range of English and Western-style equestrian products. According to a 2005 study completed by Deloitte Consulting for the American Horse Council, more than nine million horses live in the US; more than two million Americans are horse owners. In the US, horses are used for a variety of activities including racing, showing, recreation, polo, farm work, ranch work, police work and rodeos. The study also notes that the horse industry produces goods and services valued at $38.8 billion and has a total impact of $101.5 billion on US gross domestic product.

All that horse related activity requires gear designed specifically for the equestrian lifestyle. Ariat is “link the Nike of the equestrian system,” Landau says.

Prior to establishing LNK, Landau was head of Apax Partners' consumer and retail group. Nasella is the forner head of Staples and the former chief executive officer of Star Markets. The third leader of LNK, Bruce Klatsky, is the forner chief executive officer of and currently the chairman of clothier Phillips-Van Heusen. With their cumulative experience in the retail sector, the three men hope to help Ariat leap higher hurdles.

BLACKSTONE IN HUGE REIT TAKE-PRIVATE
The Blackstone Group is to take over Sam Zell's Equity Office Properties Trust, the US's largest publicly traded owner of offices, in a deal worth $36 billion including $17 billion of debt. The mega-transaction eclipses the purchase earlier this year of hospital operator HCA Inc for $33 billion to become the largest private equity deal in history. Blackstone is buying Equity Office, which is a Real Estate Investment Trust (Reir) with 580 buildings. Zell, who has increasingly been concentrating on investments in Latin America, is commonly regarded as the “elder statesman” of private equity real estate and one of the most successful investors in the modern era.

ONTARIO TEACHERS IN $2.6BN CONTAINER PORT DEAL
Ontario Teachers' Pension Plan has announced plans to buy four marine container terminals from Orient Overseas (International) of Hong Kong for approximately $2.6 billion (€2 billion). The deal was led by Jim Leech, senior vice president of Teachers' Private Capital, the private investment arm of the pension plan's unique direct investment programme. Teacher's Private Capital already has a $6.5 billion portfolio of infrastructure and timber assets, according to the pension. This most recent deal includes the transfer of container terminals in Staten Island, New York; Bayonne, New Jersey; and Vancouver, British Columbia.

BAIN TO ACQUIRE OUTBACK STEAKHOUSE
Boston-based global private investment firm Bain Capital Partners has joined Catterton Partners, a Greenwich, Connecticut-based private equity firm that specialises in the consumer sector, to acquire OSI Restaurant Partners, a Tampa, Florida-based restaurant company, for $40 per share, or approximately $3.2 billion (€2.5 billion) OSI said last month. OSI's founders, Chris Sullivan, Robert Basham and J. Timothy Gannon, will also take part in the deal. Founded in 1988, OSI's chains include Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, Roy's, Lee Roy Selmon's Blue Coral Seafood & Spirits and Cheeseburger in Paradise. The restaurants operate in 50 states and in 21 countries worldwide.

BAIN, TH LEE NAB CLEAR CHANNEL
Boston-based private equity firms Bain Capital and Thomas H. Lee Partners have won a bid to acquire media and entertainment giant Clear Channel Communications for approximately $26.7 billion (€20.8 billion), Clear Channel said in a statement. The transaction value includes approximately $8 billion of debt. Clear Channel plans to sell 448 of its 1,150 radio stations, the company said in a separate statement. Dallas private equity firm Hicks Muse Tate & Furst (now HM Capital Partners) owned Clear Channel for 11 year and completed an exit in May of 2005. That exit resulted in a loss for Hicks Muse Fund IV investors but a slight profit for Hicks Muse Fund III investors.

MADISON DEARBORN TO BUY YANKEE CANDLE
Madison Dearborn Partners, a buyout firm based in Chicago, Illinois, has agreed to acquire the South Deerfield, Massachusetts-based Yankee Candle Company, a 36-year-old manufacturer of scented candles, for approximately $1.7 billion (€1.4 billion) in late October. The transaction value includes approximately $300 million in assumed debt. Yankee Candle's shareholders will receive $34.75 per share, which is a 57 percent premium over the company's July 25 closing price. New York-based Forstmann Little acquired Yankee Candle in 1998 for approximately $500 million. Yankee Candle then went public the next year at double that valuation.

RIPPLEWOOD BUYS READER'S DIGEST
New York-based Ripplewood Holdings will acquire The Reader's Digest Association (RDA), a New York-based global publishing and direct mail company, for approximately $2.4 billion (€1.9 billion), including the assumption of debt, RDA said in a statement. Founded in 1922 by Dewitt and Lila Wallace, the American magazine Reader's Digest contains a mix of informative and entertaining content. RDA's other products include Taste of Home, a food and cooking magazine in the US, and Every Day with Rachel Ray, a cooking magazine of magazine's namesake. RDA published approximately 50 million books on topics ranging from health to gardening RDA went public in 1990.

PRIVATE EQUITY GROUP TO ACQUIRE EDDIE BAUER
San Francisco, California-based Golden Gate Capital has joined an affiliate of Boca Raton, Florida-based Sun Capital Partners to acquire Redmond, Washington-based apparel retailer Eddie Bauer for $9.25 per share in cash, or $614 million (€479.6 million), Eddie Bauer Holdings said last month. The transaction includes debt of approximately $328 million. “We believe that the transaction will provide Eddie Bauer with new resources and the time necessary to execute our turnaround strategy,” said Fabian Mansson, Eddie Bauer's chief executive officer, in a statement, Eddie Bauer began looking at strategic alternatives in May. The transaction is expected to be completed in the first quarter of 2007.

CAXTON-ISEMAN IN GAS AND WELDING DEAL
New York-based private equity firm Caxton-Iseman has agreed to acquire Valley National Gases, a Washington, Pennsylvania-based gas and welding company, for $312 million (€243 million). The transaction value includes $63 million of debt. Valley National's public shareholders will receive $27 per share in cash, which was valley National's closing price on Monday, November 13. Gary West, Valley National's chairman of the board, will receive $24.52 per share in cash, which is $2.48, or approximately 10 percent, less than the public shareholders will receive. West owns approximately 72 percent of the company. The deal is expected to close in the first quarter of next year.

FREMONT, TPG TO ACUIRE INSURANCE COMPANY
Elara Holdings, an affiliate of San Francisco and Boston-based Fremont Partners and San Francisco-based Texas Pacific Group, has agreed to acquire Nashville, Tennessee-based insurance holding company Direct General in a transaction valued at approximately $628 million (€471 million) including debt, Direct General said in a statement.