Launched in 1992, private equity firm Madison Dearborn Partners, LLC ("MDP") has grown into a powerhouse. The firm invests in a wide array of industries such as communications, consumer, financial services, health care and so on.

However, MDP is now feeling the pressures from the credit crunch. In raising its next fund, investors have been fairly lukewarm. Instead, MDP is now planning to raise a mere $7.5 billion. The original goal was $10 billion.

Actually, when compared to the 1990s, this is still a pretty big fund and will generate juicy fees. What's more, MDP is likely to get some nice valuations on deals, which should benefit investors over the long haul.

Although, things are far from done. MDP has raised about $4 billion so far, and if the markets continue to be rocky, even the $7.5 billion target could be elusive.

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.

Madison Dearborn Partners wants 'only' $7.5 billion originally appeared on BloggingStocks on Fri, 22 Aug 2008 14:48:00 EST. Please see our terms for use of feeds.

It's been a long process, but there's finally a deal. BCE (NYSE: BCE), which is the largest telecom company in Canada, has agreed to a $48.82 billion deal. The buyers include the Ontario Teachers Pension Plan, Providence Equity Partners, and Madison Dearborn Partners.

And, yes, it's the biggest buyout in Canada's history. It's even bigger than the TXU (NYSE: TXU) deal.

The transaction involved several other potential suitors, such as KKR and Cerberus Capital.

Because of increased competition and slower growth, BCE was ripe for a buyout. It also helps that the company has juicy cash flows.

So, by being a private company, BCE will have more leeway in making some key operational changes (such as layoffs and spin-offs).

The biggest winners are BCE's shareholders. After all, since late March, the shares have surged about 40%.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

BCE makes Canadian buyout history originally appeared on BloggingStocks on Sat, 30 Jun 2007 18:10:00 EST. Please see our terms for use of feeds.

BCE Inc. (NYSE: BCE), the big Canadian phone company, is being bought out by the Teachers Private Capital, the private investment arm of the Ontario Teachers Pension Plan, Providence Equity Partners Inc., and Madison Dearborn Partners LLC. Private equity comes to Canada. The price was over $48 billion.

The price is virtually no premium to the current value. The stock trades at $38. The rationale for this is that BCE's shares have risen about 40% since rumors about a buyout began to circulate in the spring. According to the company's PR statement: "The transaction values BCE at 7.8 times EBITDA (earnings before interest, taxes, depreciation, and amortization) for the 12-month period ending March 31, 2007."

This is just the kind of transaction that institutional shareholders hate. And, it's probable that the purchase will be challenged by large mutual funds and pensions that own shares. The argument that the buyers make is that it's not their fault that rumors sent the share price up. The shareholders argue that there should be a premium to the current price regardless of what caused the shares to trade where they are.

Assume that this deal is not done yet.

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

The buyout business hits Canada originally appeared on BloggingStocks on Sat, 30 Jun 2007 13:10:00 EST. Please see our terms for use of feeds.

When BloggingStocks's Tom Taulli wrote that Topps (NASDAQ: TOPP) had hit a single with it's agreement to be acquired by Madison Dearborn Partners and The Tornante Company, he realized a problem with the proposed buyout that has come to irritate many of the company's largest shareholders. The $9.75 per share offer wasn't much of a premium to the current share price, and left the company's long-term shareholders with a return on investment that was mediocre at best.

Then a grey knight arrived on the scene. Competitor Upper Deck came forward with an offer of $10.75 per share, but Topps rejected the offer, saying that Upper Deck had not demonstrated adequate financing and had failed to offer an adequate break-up fee. Topps also cited anti-trust concerns given that Topps and Upper Deck are the two biggest players in the trading card industry.

Having been spurned by Topps's management, Upper Deck is turning up the heat with a tender offer for all of the company's shares at $10.75 each, a premium of 10.25% to the $9.75 that Topps had previously agreed to be acquired at.

There's sure to be a lot more drama to come and the history of Topps had plenty of drama before this even started. Check out this Wikipedia entry for a nice overview of the company's history.

Upper Deck gets hostile in pursuit of Topps originally appeared on BloggingStocks on Tue, 26 Jun 2007 12:10:00 EST. Please see our terms for use of feeds.

Dominion Resources Inc. (NYSE: D) is making some big changes. The company wants to unload about 83% of its oil and gas production business. The reserves are in areas such as New Mexico, the Permian Basin in Texas, the Gulf of Mexico and Canada.

Such a deal will carry a heavy price -- the estimate is $15 billion or so. But of course there is a ton of cash in the private equity sector and it looks like Dominion will have no trouble finding buyers.

According to the Wall Street Journal, one group includes firms like Madison Dearborn Partners, Warburg Pincus, First Reserve and Carlyle Group. And it looks like Goldman Sachs (NYSE: GS0) and Morgan Stanley (NYSE: MS) will also join the party.

Aren't these companies arch enemies?

Yes they are. But big-time deals require teamwork. Besides, Dominion's assets are top-notch and should be a strong source of ongoing cash flow generation as well as tax benefits.

And the interest in Dominion is another sign that private equity thinks that over the new few years energy prices should increase.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Dominion Resources attracts private equity originally appeared on BloggingStocks on Wed, 24 Jan 2007 12:46:00 EST. Please see our terms for use of feeds.

The pursuit of the Tribune Company (NYSE:TRB) is no secret. But, is anyone willing to write a check to buy the firm? According to CNBC's M&A maestro, David Faber, it looks like the answer is "no."

Apparently there is no interest from private equity firms, such as Apollo Management, Providence Equity Partners, and Madison Dearborn Partners. No doubt, these firms had months to crunch the numbers. What's more, they have tremendous experience in the media industry. It looks like the price is too high (there may also be adverse tax consequences). Besides, the industry outlook for newspapers looks particularly bleak for the long-term.

However, Tribune may still find a buyer - it would likely be from a billionaire who wants a trophy but not necessarily an attractive business.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Is there any hope for a Tribune deal in the near future? originally appeared on BloggingStocks on Wed, 17 Jan 2007 13:20:00 EST. Please see our terms for use of feeds.