American Standard Companies (NYSE: ASD) is going through an extreme makeover. The company plans to spin off its Vehicle Control Systems division (which will be called WABCO) and wants to focus on its air condition business. So, the name of the reconstituted entity will be Trane (which generates about $6.8 billion in revenues).

To this end, today American Standard said it sold its Bath and Kitchen products unit to private equity firm, Bain Capital. The price tag: $1.76 billion, cash.

Actually, it looks like a good deal for Bain. The Bath & Kitchen unit posted $2.4 billion in revenues in 2006 and has a variety of brands like American Standard, Ideal Standard, Armitage Shanks, Porcher, Jado, Ceramica Dolomite and Vidima.

Then again, the unit has been under pressure lately. For example, increased commodities prices has been tough.

But, by being a private company – and independent of a major parent – there's likely to be some operational improvements.

American Standard retained Lazard (NYSE: LAZ) for its financial advisor. Lehman Brothers (NYSE: LEH) represented Bain.

In today's trading, American Standard's stock price was up $0.15 to $59.40.

To check out some more recent M&A transactions, click here.

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

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.

Founded in 1984, Bain Capital has thrived in various market cycles. It certainly has helped that the firm has backed top companies like Staples, Inc. (NYSE: SPLS).

While the past few years have been standout for the private equity sector, Bain still realizes that the good times will not last forever. So, in its raise of its next fund – with a goal of $15 billion – Bain is hedging a bit. That is, the structure will have two tiers – one of which is $10 billion and another with $5 billion. This is according to a recent story in the Wall Street Journal [a paid service].

Basically, the structure will allow for flexibility. If Bain wants to do a mega deal, it will have the firepower. But, most importantly, the managers will not feel that they have to do deals.

But isn't Bain passing up fees? Not necessarily. You see, the first $10 billion will have a fee of 30% of the overall profits. Keep in mind that the standard fee is 20% (and this is the fee for the $5 billion fund).

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

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.

According to sources, Bain Capital, Carlyle Group and Clayton, Dubilier & Rice have won the $10 billion auction for Home Depot's (NYSE: HD) Supply Unit and were finalizing the deal today, Reuters reports.

Several private equity groups had shown interest in HD Supply, which sells business materials, waste water and utility products to municipalities and contractors, but because of the ongoing slump in the U.S. housing market, those firms backed away.

The $10 billion price tag was somewhat lower than some investors and analysts expected, according to Farr Miller's Keith Davis, which owns Home Depot shares. The winning group outbid an offer from Thomas H. Lee Partners and CCMP Capital.

By selling off HD Supply, Home Depot will now be able to better focus on the retail division and its arch competitor, Lowe's (NYSE: LOW). That's something ex-CEO Bob Nardelli failed to realize about the low-margin Supply division throughout his six-year tenure.

With Home Depot's retail unit slumping and the need to get back to basics, I certainly hope management doesn't make any aesthetic changes, similar to Wal-Mart's (NYSE: WMT) change to polo's and khakis. Could you imagine a Home Depot employee in khakis, without his trusty orange apron?

Kevin Shult is a writer for TheFlyOnTheWall.com (subscription required).

Dealbook reports that Home Depot, Inc. (NYSE: HD) will sell its weakly performing HD Supply Unit to a group of private equity firms for $10 billion.

In effect, Home Depot is finally realizing what a colossal blunder its former CEO, Bob Nardelli, made in creating the business back in 2000. The reason it was such a lousy investment is that the Supply Unit works with builders who have much greater negotiating leverage than individual homeowners. The result is that the margins Home Depot earned in selling home building supplies to builders were lousy.

Nardelli, who resigned this January with a $270 million haul after six years of presiding over Home Depot's stagnant stock during one of the biggest housing booms in history. Now it will be up to Bain Capital, the Carlyle Group and Clayton Dubilier & Rice to find a way to boost the profits of this $10 billion business.

Home Depot stock is up 1% in pre-market trading. This suggests that while the market likes the move, it wonders how management will come up with $10 billion worth of more profitable revenue to make up the low margin revenue to be heading the way of private equity.

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 Home Depot.

It's been tough going for the buyout of OSI Restaurant Partners (NYSE:OSI), which is the operator of the Outback Steakhouse. Basically, shareholders have been agitating for a higher price.

As a result, OSI's private equity buyers -- Bain Capital Partners LLC and Catterton Partners – postponed the shareholder vote twice. But isn't this just delaying the inevitable?

Well, today the private equity buyers upped the bid from $40 to $41.15. This comes to roughly $3.1 billion.

It may seem like a small adjustment, but it's likely to get enough support. After all, OSI's business has been soft lately.

But, this is also a sign that shareholders are wielding their power. So, going forward, it's a good bet we'll see increased bids on major buyouts deals.

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

Just a couple weeks ago, it looked like the $26 billion buyout deal for Clear Channel Communications (NYSE: CCU) was dead.

But then again, doing such a deal is expensive and time-consuming. So why walk away? Maybe try to find a way to get things back on track?

Well, according to a piece in today's Wall Street Journal, the deal may actually get done.

Basically, the main opposition has come from two major shareholders: Fidelity Investments and Highfields Capital Management. They have a fiduciary responsibility to get the best value for their investors, right?

That means bidding things up. And it appears that Clear Channels buyers -- Bain Capital and Thomas H. Lee Partners -- will do just that. How much? The amount is about 20 cents to $39.20 per share.

There is something else: the existing shareholders will get a chance to participate in the private company, up to 30%. So perhaps when you blend things together, the ultimate value is higher than just 20 cents per share.

And with Clear Channel's stock at about $37.79, it does look like the Street is betting that there will indeed be a deal.

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

One thing is clear at Clear Channel Communications (NYSE: CCU) -- the company's $19.5 billion buyout is not looking good.

According to a Reuters story, the proxy advisory service ISS said that the deal is too cheap and that shareholders should reject it. The firm is highly influential in such matters and institutional investors often follow its recommendations.

The private equity buyers -- Bain Capital and Thomas H. Lee -- have upped their bid from $36.70 to $39. They also have said it was their "best and final" offer.

Well, in light of the ISS decision and vocal opposition from major shareholders like Fidelity, it look s like the company will not get shareholder approval. Because of Texas corporate law, Clear Channel needs to get a two-thirds majority. The shareholder meeting is on May 8th.

Then again, this may also be an indication that private equity firms are trying to show some restraint.

And, yes, it looks like the Street has already factored these things in. Clear Channel's stock is at $36 today.

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

The Asian markets have been underrepresented in terms of private equity activity. But that's going to change fast.

This week, for example, Bain Capital raised a $1 billion Asian fund (this is the first one for the firm). This is according to a report from the Associated Press.

The main focus will be in China and Japan. No doubt, there are lots of companies to choose from. Although, dealing with the regulations will not be easy.

And, according to a report in Reuters, CCMP is in the process of raising a $3 billion Asian fund. The firm does have lots of experience in the region though. Its Asia Opportunity Fund II has a size of $1.6 billion.

Oh, and it looks like KKR is raising an Asia Fund and is targeting a cool $4 billion or so.

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

Today, Clear Channel Communications (NYSE: CCU) reported its Q1 results. Revenues increased from $1.49 billion to $1.61 billion, while net income rose from $96.8 million or $0.19 per share to $102.2 million, or $0.21 per share.

But the stock barely moved. Then again, Clear Channel is in the process of a leveraged buyout and the deal is looking iffy.

Recently, Clear Channel's private equity buyers -- Bain Capital Partners and Thomas H. Lee Partners -- upped their bid from $37.60 to $39. But it may not be enough to satisfy major investors like Fidelity Investments and Highfields Capital Management.

Looking at the five-year stock chart of Clear Channel is depressing. The stock price is off about a third. The largest radio operator can't seem to find growth opportunities, and then there are the threats from Internet radio, Apple (NASDAQ: AAPL) iPods, satellite radios, and other digital alternatives.

So if things are so bleak, why would Bain and Thomas H. Lee want to buy the company? Aren't these folks smart and have a history of posting strong returns?

I think the answer is fairly obvious. These investors see a value play.

The $19.5 billion buyout of Clear Channel (NYSE: CCU) is still not very clear. Even when its buyers -- Thomas H. Lee and Bain Capital -- boosted the price to $39 from $37.50, some of Clear Channel's investors were not convinced.

But Clear Channel is not stopping. In fact, the firm is already paving the way for major changes.

This week, the firm sold its TV group for $1.2 billion to private equity firm Providence Equity Partners. The deal includes 56 stations.

There are also plans to sell off radio stations.

Basically, these actions are needed to pass muster with the antitrust authorities. Moreover, the cash will be helpful when debt is loaded on the balance sheet.

Yet, for Clear Channel to get its own buyout deal completed, it needs to secure a two-thirds vote from shareholders. That's a tough hurdle -- given the current stock price of $35.75, it looks like the mega deal probably won't happen.

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

About 20 years ago, American business was running scared. The reason? Leveraged buyout (LBO) firms and corporate raiders, fueled by junk bonds, were storming corporate America. This feverish gate crashing peaked with the then-record $33 billion LBO of RJR Nabisco, which Bryan Burrough described in his book, Barbarians at the Gate.

According to ABC News, the LBO crowd is back -- but with a new name and a much friendlier attitude to incumbent management. This Monday I was leading a discussion with my MBA students on whether the LBO wave of the 1980s was beneficial and how it compared to the current decade's wave. The beneficiaries back then were the LBO firms and the banks who financed the deals. The losers were the acquired company's shareholders -- who got taken out at a slight premium -- and the company's managers and employees -- whose lost jobs financed the debt used to do the deals.

When the LBO business collapsed in the wake of junk bond peddler, Drexel Burnham's bankruptcy, the anti-LBO backlash was furious. America was outraged by LBO proponents' ostentatious displays of wealth and the layoffs they used to pay down the debt they took on to finance their hostile deals.

This week, we got the tallies on the fundraising for the upcoming presidential election. As expected, the numbers are big. For example, Hillary Clinton raised a cool $26 million in the first quarter.

But there was one apparent surprise; that is, Republican Mitt Romney raised $21 million.

Not bad for someone who doesn't have much name recognition with the American populace.

Then again, he is well-known in the private equity world. You see, back in 1984, Romney founded Bain Capital Partners, LLC. The firm has had big hits -- like Staples Inc. (NASDAQ: SPLS) -- and currently manages $38 billion.

Yes, it's fertile ground for a politician to get big-time contributions. What's more, as private equity firms get bigger, they will realize they need to be more politically savvy.

With his connections, there shouldn't be any shortage of money for Romney and it's a good bet we'll be seeing a lot more of him.

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