Continue reading Sensata Gives IPOs a Much-Needed Charge

Sensata Gives IPOs a Much-Needed Charge originally appeared on BloggingStocks on Thu, 11 Mar 2010 13:40:00 EST. Please see our terms for use of feeds.

Continue reading No Bargains in Private Equity, Unlike 2001

No Bargains in Private Equity, Unlike 2001 originally appeared on BloggingStocks on Mon, 01 Mar 2010 15:10:00 EST. Please see our terms for use of feeds.

Continue reading AB InBev hangs on to Beck's brand

AB InBev hangs on to Beck's brand originally appeared on BloggingStocks on Mon, 30 Nov 2009 09:20:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Financial Times reported that Bain Capital, The Blackstone Group LP (NYSE: BX) and General Electric Company's (NYSE: GE) NBC universal will acquire The Weather Channel properties from Landmark Communications for approximately $3.2B in a leveraged buy-out. The Weather Channel will be run separately.
• A top Goldman Sachs Group Inc (NYSE: GS) trader is defecting to GLG Partners Inc (NYSE: GLG), the UK's second-largest hedge fund. Goldman's Driss Ben-Brahim, a partner in the firm and the head of its emerging market trading business, will take over GLG's $1.2B emerging markets special situations fund, the Financial Times reported.

• Take-Two Interactive Software Inc (NASDAQ: TTWO), which makes video games, will probably sign video game creator Ken Levine to a new contract. The deal would bolster Take Two's argument that its value exceeds the $25.74 per share that Electronic Arts Inc (NASDAQ: ERTS) has offered as a takeover price for the company, The New York Post believes.

• Reuters reported that Deutsche Bank AG (NYSE: DB) is the only bidder remaining for Citigroup Incorporated's (NYSE: C) German retail operations. Sources said Commerzbank AG (OTC: CRZBY) dropped out of the running on Friday.

Newspaper wrap-up: NBC Universal and consortium to acquire The Weather Channel originally appeared on BloggingStocks on Mon, 07 Jul 2008 10:50:00 EST. Please see our terms for use of feeds.

The Japanese market for buyouts is certainly alluring (basically, there is lots of opportunity to cut costs). But, it has been tough for US private equity firms to break in.

But, today there was a success: D&M Holdings Inc. agreed to a $470 tender offer from Bain Capital Partners LLC. This is according to a report in the Wall Street Journal (subscription required).

D&M sells premium and super premium audio and video products, with brands like Denon and Snell. The company got its start in 1910 and has since engaged in a variety of acquisitions, such as for McIntosh Laboratory, Allen&Heath Holdings and Boston Acoustics.

D&M does have an attractive long-term potential. After all, with the surge in wealth in Asian countries, there is likely to be strong demand for D&M products. And, with the financial backing of Bain, there are likely to be more acquisitions to enhance the D&M platform.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Bain: a rising sun for private equity? originally appeared on BloggingStocks on Fri, 20 Jun 2008 15:31:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Wendy's International Inc (NYSE: WEN), struggling since the 2002 death of founder Dave Thomas, and pressed by investor Nelson Peltz to improve results, will today announce a deal with Peltz, the Wall Street Journal reported.
• The Wall Street Journal also reported that the House Financial Services Committee voted to approve $15B in loans and grants so that local governments can buy foreclosed homes throughout the U.S. Committee chairman Barney Frank said the bill will avoid abuse, including requiring that purchased homes be a minimum 60 days into the process.
• Adding to evidence of a rally in corporate credit markets, the Financial Times reported that Deutsche Bank AG (NYSE: DB) is preparing another big sell-off of its leveraged loans in Europe.

• Several e-mails that have been obtained by the New York Post sent between Wall Street banks may prove a serious setback in the fight over the takeover Clear Channel Communications Inc (NYSE: CCU). The e-mails reportedly show the banks, led by Citigroup Incorporated (NYSE: C) and Deutsche Bank, looking to get out of financing the buyout by Bain Capital and THL Partners by offering terms "they know the [firms] won't be able to accept."

Newspaper wrap-up: Wendy's and Nelson Peltz to today unveil deal originally appeared on BloggingStocks on Thu, 24 Apr 2008 07:50:00 EST. Please see our terms for use of feeds.

Whomever buys The Weather Channel will probably see nothing but blue skies.ss

Disney, CBS, GE, see blue skies ahead for The Weather Channel originally appeared on BloggingStocks on Thu, 06 Mar 2008 17:07:00 EST. Please see our terms for use of feeds.

Mitt Romney, the uber-capitalist candidate, bows out of presidential race originally appeared on BloggingStocks on Thu, 07 Feb 2008 13:45:00 EST. Please see our terms for use of feeds.

Not long ago, a billion-dollar private equity deal wouldn't have received much attention. But with the severe credit crunch, it's now amazing to see such a deal.

Well, we got one today; that is, the $1.3 billion buyout of Bright Horizons Family Solutions, Inc. (Nasdaq: BFAM). The private equity sponsor is Bain Capital. The debt facilities will come from Goldman Sachs Group, Inc. (NYSE: GS).

And yes, the transaction has a good amount of equity (Bain will write a check for $640 million). Basically, the debt markets are still jittery.

Bright Horizons is a provider of employer-sponsored child care and early education services. There are more than 600 customers, with 90 of the Fortune 500. Over the past year, there was about $762 million in revenues and $100 million in EBITDA, although Bright Horizons did had a tough Q3 (because of weakness in enrollment, which may have been the result of the slowing economy).

In today's trading, the shares of Bright Horizons spiked 36.81% to $44.86.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Sunny days for Bright Horizons originally appeared on BloggingStocks on Mon, 14 Jan 2008 18:56:00 EST. Please see our terms for use of feeds.

Clear Channel buyout in trouble? originally appeared on BloggingStocks on Tue, 08 Jan 2008 14:58:00 EST. Please see our terms for use of feeds.

A secondary buyout is when private equity firm buys a position from another private equity firm. And with private equity deals getting tougher, we may see more of these transactions, especially from top tier firms that have lots of capital to throw around.

So today there was a biggie secondary buyout: Bain Capital, TPG Capital and 3i have agreed to purchase Quintiles Transnational.

Back in 2003, the company went private for about $1.7 billion and the private equity sponsor was One Equity Partners. Interestingly enough, TPG was an investor in the transaction as well.

With about 19,000 employees, Quintiles has a global footprint in the healthcare industry, helping companies deal with the complexities of clinical trials. Such engagements are vitally important and tend to be long-term, allowing for nice cash flows. No doubt, this is attractive for private equity operators.

The price tag on the Quintiles deal was not disclosed. But the rumor is that it was more than $3 billion.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Bain, TPG in secondary buyout for Quintiles Transnational originally appeared on BloggingStocks on Fri, 21 Dec 2007 18:35:00 EST. Please see our terms for use of feeds.

This morning 3Com (NASDAQ: COMS) announced that private equity firm, Bain Capital, would put it out of its misery and pay $2.2 billion in cash for the company. 3Com has lagged so far behind that it has been painful to watch. 3Com and Cisco Systems (NASDAQ: CSCO) indeed could provide at least two to three chapters in an investing teaching and history book. Here's the CliffsNotes version:

Summer of 1994 was a tough technology environment. Technology had a great run from 1990 through 1994, till summer that is. Valuations contracted and investor fatigue set in for about four to five months. I was traveling through Silicon Valley with a couple of British portfolio managers visiting companies. One day we had a breakfast meeting with then CEO Eric Benamou of 3Com and lunch with a senior VP at Cisco (whose name escapes me). Benamou was an intellectual, a refined man, but did not possess the street smarts necessary for a tech company CEO. He was arrogant and bluntly declared that Cisco's days were numbered and 3Com would acquire any tech company necessary to achieve total domination. OK, great, and we went on to Cisco for lunch.

The senior VP was a classy guy, never said a bad word about any competitor and just explained Cisco's game plan and execution philosophy. Here is the funny part: In July 1994, BOTH companies had a market capitalization of $9 billion.

Continue reading Cisco (CSCO) today 100 times bigger than 3Com (COMS) -- it wasn't in 1994

Cisco (CSCO) today 100 times bigger than 3Com (COMS) -- it wasn't in 1994 originally appeared on BloggingStocks on Fri, 28 Sep 2007 13:40:00 EST. Please see our terms for use of feeds.

According to the Wall Street Journal [subscription required] Marlborough, MA-based 3Com Corp. (NASDAQ: COMS) is going private with the help of Bain Capital and Huawei Technologies for more than $2 billion -- or $5.50 a share. 3Com is up 34% to $4.94 in pre-market.

3Com has been hobbled for most of this decade but it has a storied history. Its founder invented Ethernet -- a way for computers to share information. It bought a company that made a very popular modem during the era when people dialed up the Internet on a telephone line. And with this acquisition came a technology which became the Palm Pilot -- a Personal Digital Assistant (PDA) which was an indispensable appendage for dot-commers in the 1990s.

Unfortunately, 3Com's financial position was weak -- it lost $89 million on $1.27 billion in sales in the year ending June 2007 but it generated $58 million in cash. It couldn't maintain its technology lead and it was surpassed by competitors in all its markets.

Continue reading 3Com (COMS) gone private

3Com (COMS) gone private originally appeared on BloggingStocks on Fri, 28 Sep 2007 09:10:00 EST. Please see our terms for use of feeds.

Time can be the enemy of buyout deals. It gives the parties more time to think about things -- or get frustrated. Just look at what happened with the Harman International Industries, Inc. (NYSE: HAR) implosion.

But, in the case of the buyout of Clear Channel (NYSE: CCU), the deal somehow appears to be mostly complete (the process took about 10 months). That is, today the company announced that its shareholders approved the transaction. As a result, the company's buyers -- Bain Capital Partners, LLC And Thomas H. Lee Partners, L.P. -- will become the new owners of the radio powerhouse.

In fact, during the buyout process, Clear Channel increased the price tag two times. There was also another interesting feature added along the way; that is, the shareholders have the right to roll over some of their equity into the private entity.

But, ultimately, the key takeaway is that radio has proven to be quite resilient. Despite competition from satellite providers and the Internet, the fact remains that traditional radio continues to be a big part of people's lives -- and more to the point, a nice cash-cow business.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Listen to this: Clear Channel (CCU) finally gets a buyout deal originally appeared on BloggingStocks on Tue, 25 Sep 2007 15:55:00 EST. Please see our terms for use of feeds.

It looks like Home Depot's sale of its wholesale division will go through. But, to add insult to injury, Home Depot (NYSE: HD) had to drop the price of Home Depot Supply from $10.3 billion to about $8.5 billion to keep private equity buyers in the deal. Then it had to guarantee $1 billion of the debt being taken on to buy the operation because large banks recoiled at the idea of loaning money to a company linked to the housing business.

Bain Capital, Carlyle Group, and Clayton, Dubilier & Rice had made the original offer. But, as the mortgage industry began to implode and home sales dropped, large banks wanted to walk away from the deal. All of the parties had a reason to keep the buy-out alive. As The Wall Street Journal writes: "Both sides had agreed that if the financing for HD Supply fell apart, it would spook debt markets further, potentially casting more doubt on a series of higher-profile transactions."

The big cut in price raises the question of whether or not Home Depot shareholders are getting a good deal. At $10.3 billion, the purchase price was at least in line with the value that the market gives Home Depot. The world's largest home supply company planned to use the money to buy back shares and perhaps pay down some of its $11 billion in debt.

But, at some point, the price is simply too poor for Home Depot shareholders to take. And, that is what may have happened.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Home Depot (HD) takes a bath on wholesale unit originally appeared on BloggingStocks on Mon, 27 Aug 2007 07:26:00 EST. Please see our terms for use of feeds.

American Standard Companies

American Standard throws out the kitchen originally appeared on BloggingStocks on Mon, 23 Jul 2007 21:57:00 EST. Please see our terms for use of feeds.

DealBook suggests that Mitt Romney's private equity cash is either greater than that of his competitors or not -- depending on which source you cite. But when you see the figure, you'll realize that this issue is besides the point. What really matters is how much money Mitt has extracted from the private equity industry.

I had the memorable experience of partnering with Bain Capital in the 1990s. I worked with two of Mitt's partners there and quite enjoyed traveling on their corporate jet to visit the headquarters of a company that Bain Capital was considering acquiring. His partners were extremely sharp business people.

But with a net worth of at least $250 million, the hundred thousand or so dollars he's raised from private equity firms is a pittance to his campaign. Dealbook said that the Wall Street Journal's numbers -- which put Mitt at the head of the pack -- were totals for the entire 2008 race -- showing him with $156,900. While the PEHub estimates -- which covered only the most recent quarter of donations from the top 11 private equity firms which belong to the Private Equity Council -- put Mitt behind his peers in private equity cash.

Mitt is loaded and the only one who could beat him on that front -- at $5.5 billion -- would be Michael Bloomberg. But he hasn't announced his candidacy -- yet.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

Mitt Romney's private equity donations a fraction of his net worth originally appeared on BloggingStocks on Thu, 19 Jul 2007 16:05:00 EST. Please see our terms for use of feeds.

Bain gets modest with its $15 billion fund originally appeared on BloggingStocks on Tue, 17 Jul 2007 16:23:00 EST. Please see our terms for use of feeds.

Zac Bissonnette posted earlier how Moody's Corp. (NYSE: MCO) criticized private equity. What strikes me is just how late Moody's is to join the critical chorus.

Roughly 11 months ago I made arguments similar to the ones that Moody's is making today. And I was pleased that some media outlets -- specifically Barron's Alan Abelson -- picked up on them. What really got me going is that as of August 2006, there were two busted IPOs from which Bain Capital -- as the Boston Globe reports enriched presidential candidate Mitt Romney -- took enormous fees:

• Vonage Holdings Corp. (NYSE: VG) - Bain Capital and others lent Vonage $200 million before taking this money-loser public. VG has lost 80% of its value since the May 2006 IPO.
• Burger King Holdings, Inc. (NYSE: BKC) - That same month, Bain Capital and others took a $30 million "management termination fee" out of Burger King before taking it public. (This fee is chump change compared to the $367 million dividend Bain Capital and its partners extracted from Burger King in February 2006.) By August 2006, Burger King had tumbled 26% since its IPO after announcing that it lost $9 million in its fiscal fourth quarter due, in part, to the management termination fee. Fortunately for its shareholders, the stock has doubled since then.

It takes a long time for a battleship the size of private equity to turn. But when Moody's -- which is supposed to be protecting the public from poorly structured debt rather than profiting from it -- kills its formerly golden goose, the time for turning may be closer than it was a year ago.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

Moody's late to the private equity bashing party originally appeared on BloggingStocks on Mon, 09 Jul 2007 11:26:00 EST. Please see our terms for use of feeds.

Home Depot sheds some dead weight originally appeared on BloggingStocks on Tue, 19 Jun 2007 15:15:00 EST. Please see our terms for use of feeds.