TPG, which is a top private equity firm, is known for its ingenuity. And, with the credit crunch, this trait is extremely important.
For example, TPG has formed an investor group – that includes some major existing institutional holders -- to invest $7 billion into Washington Mutual (NYSE: WM). The deal includes a blend of common and convertible preferred shares. In fact, this transaction is likely to be a template for more deals in the banking industry.
Well, TPG has also structured another interesting deal (which hasn't gotten much notice). That is, the firm has invested roughly $800 million for a 50% ownership stake in SIA International.
The company, which is the largest pharma distributor in Russia, generates revenues of about $2.7 billion and has deals with more than 30,000 pharmacies. If anything, this could be a platform for more acquisitions in the sector. After all, the Russian pharma market is in excess of $12 billion.
For the most part, TPG realizes that – with a lack of debt financing in the global markets – it needs to find investment opportunities that require lots of equity to fuel growth. But, at the same time, it involves a good amount of risk.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
4-10-2008 @ 1:38PM
B. Harrison said...
Is TPG hedging on the notion that IF they are big enough, if they have major failures, that the Fed will step in and bial them out?
Might the "new game in the business" become "if you are big enough, the Fed can't afford for you to fail" . . . right?