Buyouts posts
FeedPosted Mar 3rd 2011 12:20PM by Tom Taulli (RSS feed)
Filed under: Rumors, Alcatel-LucentADS (ALU)
For the past decade, it's been brutal for shareholders of Alcatel-Lucent (ALU). With the contraction in the telecom market, the sales for equipment has plunged.
Yet since September, investors have been piling into Alcatel-Lucent as the shares have gone from $2.80 to $5.34. The reason? Well, the smartphone megatrend is a key factor. As carriers bolster their networks, they need to go to providers like Alcatel-Lucent.
Continue reading Is Alcatel-Lucent Buyout Bait?
Posted Oct 11th 2010 9:40AM by Mark Fightmaster (RSS feed)
Filed under: Deals, BHP Billiton Ltd ADR (BHP), Potash Corp. of Saskatchewan (POT)

Canadian fertilizer firm Potash Corp of
Saskatchewan (
POT) is in the middle of a rash of takeover-related news this morning. First, Britain's
Sunday Telegraph reports that Potash is working on a break-up plan in hopes of stopping BHP Billiton's (
BHP)
takeover bid. According to the report, Potash would sell its nitrogen and phosphorous assets, pay a $70 per share dividend, and increase its debt pile.
In addition to the weekend's news,
The Globe and Mail reported Friday that Chinese firm Sinochem has approached the National Mineral Development Corporation (NMDC) about a joint bid for Potash. Sinochem is making the pitch for a joint bid because it may believe that an individual bid would be shot down by Canada's political powers.
Continue reading Potash Mulling Break-Up
Posted Mar 1st 2010 3:10PM by Tom Johansmeyer (RSS feed)
Filed under: Private Equity, KKR Financial (KFN), Blackstone Group L.P (BX)

If you're looking to buy into an upswing post-recession, it doesn't look like the private equity market will be on your list. Valuations didn't fall as much as you might think, meaning that
the bargains you usually find during a downturn just aren't showing up this time.
In the
leveraged buyout market, prices were around 25% higher, on average, than they were in 2001, when the dotcom economy fell apart, according to Standard & Poor's Leveraged Commentary & Data. And transactions closed in the past three months have hit heir highest levels since the
private equity market peaked in 2007.
Says Christopher O'Brien, president for U.S. and Europe of Investcorp Bank BSC, another "golden era" isn't coming.
He tells Bloomberg News, "There's a lot of pressure to put investors' money to work now, and valuations are still high. It's a seller's market."
Continue reading No Bargains in Private Equity, Unlike 2001
Posted Jan 15th 2010 10:30AM by Tom Johansmeyer (RSS feed)
Filed under: Private Equity

Mega-
buyout funds are turning in their worst returns over one-, three- and five-year periods. Large buyout funds haven't performed well either, with small buyout funds faring best, according to
alternative investment research firm Preqin. With enough time having passed from the financial market mayhem of the third quarter of 2008, it's now possible to gain some perspective and measure the results.
Mega-buyout funds' returns were negative over the past year, down 31.4%. Over the last three years, returns were still negative at 3.1%. But over the last five years, mega-buyout funds returns a solid 23.9%.
Continue reading Mega-Buyout Funds Poised for Growth
Posted Jan 8th 2010 11:40AM by Tom Johansmeyer (RSS feed)
Filed under: Private Equity
If your job last year was to raise private equity capital, you couldn't have been all that happy. Capital raising hit its lowest level since 2003, according to Dow Jones LP Source by way of VentureBeat, falling to $95.8 billion for 331 funds. In 2008, $300 billion had been raised across 508 funds, translating to a 68% year-over-year decline. Nobody was spared the struggle to raise funds, except secondary funds, which reported a 50% surge in fund raising.
The buyout fund, among the largest sectors in the private equity business, saw the capital raised fall 72.5%, from $195.5 billion in 2008 to a mere $53.7 billion in 2009. The largest buyout funds suffered most: only six funds with more than $6 billion under management raised an aggregate $14 billion. The year before, it took only 12 funds of this size to pull in a combined $75.2 billion in fresh capital.
Continue reading Private Equity Capital Raising Thrashed in 2009
Posted Dec 31st 2009 1:40PM by Tom Johansmeyer (RSS feed)
Filed under: Deals, Competitive Strategy, Private Equity, Economic Data

In the buyout corner of the
private equity business, "dry powder" continued to grow in 2009. Industry slang for capital available for investment, this measure points to how much activity private equity funds are capable of completing.
From December 2004 through December 2008,
according to data from alternative investment research firm Preqin, the amount of funds on the sidelines surged from $178 billion to $501 billion for the buyout sector, nearly tripling. This year, buyout dry powder only increased by $3 billion, to $504.28 billion. While this may feel like little more than a rounding error, it suggests stability in the sector after what has been a trying climate for financial services business of all types.
Continue reading Buyout Capacity for Private Equity Biz Still Growing
Posted Dec 12th 2009 1:20PM by Tom Johansmeyer (RSS feed)
Filed under: Private Equity, Amer Intl Group (AIG), Recession, Financial Crisis
The private equity market was hit hard by the financial crisis last year, but it's already on the road to recovery, according to a new report by Preqin (pdf).
From the first quarter to the second, this year, increasing returns and valuations have given investors a reason to hope, even though the industry's average return is down 24.1% for the 12-month period ending June 30, 2009. The negative return still outpaced the S&P 500, MSCI Europe and MSCI Emerging Markets indexes, the alternative investment research firm says, which returned -26.2%, -34.1% and -27.8%, respectively -- and the 12-month average improved from -30% for the year-long period ending March 31, 2009.
Continue reading Private equity returns off 24% but still ahead of the broader market
Posted Nov 30th 2009 9:20AM by Beth Gaston Moon (RSS feed)
Filed under: Deals, Rumors

First brewed in 1873, Beck's beer is crisp, fresh, and "full of character." It's also still part of the growing AB InBev family. Anheuser-Busch InBev, which is of course the Belgian-based parent of Anheuser-Busch (
BUD), has
abandoned plans to sell the German beer brand to Bain Capital.
According to a German magazine, citing financial sources, this was really an eleventh-hour decision, as the contracts were already drawn up and Bain had secured $2.54 billion in financing.
Continue reading AB InBev hangs on to Beck's brand
Posted Aug 2nd 2009 11:30AM by Tom Johansmeyer (RSS feed)
Filed under: Private Equity
Private equity returns are down 27.6% year-over-year for the 12-month period ending July 30, 2009, according to a Preqin report received by BloggingStocks. The London-based research house notes, however, that the global private equity industry's dry powder (i.e., uncommitted assets) continues to exceed $1 trillion, suggesting that there is still plenty of capital waiting for a rainy day.
Returns for the past 12 months reflect all the nastiness we've seen and lived -- bailouts, company collapses, equity and credit market mayhem and unemployment rates dangerously close to double-digits. But, the money is still coming in. Preqin puts the rate by which contributions outpaced distributions at 235% for buyout funds in 2008. This category raised $148 billion while distributing only $63 billion, making last year the most imbalanced for these two measures in history.
Continue reading Private equity returns down, still plenty of cash on the sidelines
Posted Jul 2nd 2009 5:15PM by Tom Johansmeyer (RSS feed)
Filed under: Deals, Private Equity, Recession
Private equity investors are using current financial market constraints on liquidity to negotiate favorable deals, as private equity general partners have watched the values of their portfolios fall profoundly. Efforts to attract additional investment haven't been easy, as potential limited partners are reluctant to make long commitments in an uncertain marketplace. This has given limited partners a stronger position from which to negotiate both fees and terms and conditions.
Limited partners are getting a leg up on the private equity funds in which they invest, signaling a change from the historical trend in which funds could push for aggressive compensation based on the returns they provide. In a poll conducted by Preqin, 43% of investors noted a power shift from fund to limited partner, with only 2% seeing a shift toward the general partner.
Continue reading Limited partners putting pressure on private equity funds to cut fees
Posted May 15th 2009 12:00PM by Trey Thoelcke (RSS feed)
Filed under: Earnings Reports, Private Equity
The operator of the Tropicana Casino and Resort, which was featured in the films Viva Las Vegas and Diamonds Are Forever, filed for bankruptcy protection in May 2008. Canadian private equity firm Onex Corp. (TSX: OCX) has succeeded in taking over the Las Vegas icon.
Onex's main buyout fund has cobbled together a stake in the casino's senior debt that will make it the largest shareholder when a restructured Tropicana emerges from bankruptcy protection.
Though Onex will gain control of a prime location in one of the hottest spots in the city and one of the busiest pedestrian intersections in the world, it comes at a time when the fortunes of sin city are suffering due to economic conditions.
Room rates have plunged and passenger traffic into the city's airport is down 14% in the first three months of the year. But Onex founder and CEO Gerry Schwartz believes that gambling is a growth industry, and that investing in Las Vegas is a long-term value because the city has historically weathered downturns better than expected.
Continue reading Las Vegas icon gets new owner
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