Glenn Hutchins, who is the co-chief executive of Silver Lake Partners, has a great piece in Fortune.com. Over the years, he has structured a variety of innovative private equity deals in the tech sector.

So, what is his take on the future? First of all, he said that "everyone" is to blame for the current financial turmoil (such as mortgage lenders, politicians, rating agencies, the Fed, homeowners and on and on). He does say that the tipping point was the collapse of Lehman Brothers, which deflated worldwide wealth.

Continue reading Silverlake's private equity chief: Is there still hope for growth and innovation?

Silverlake's private equity chief: Is there still hope for growth and innovation? originally appeared on BloggingStocks on Wed, 18 Mar 2009 14:10:00 EST. Please see our terms for use of feeds.

With the deal market drying up, private equity firms need to find unique niches. One player that has been quite successful at this is Silver Lake Partners, which focuses primarily on tech deals. Some of its transactions include Flextronics, Avaya, Sabre Holdings and SunGard Data.

Silver Lake is now expanding its franchise. The firm recently hired Charles Giancarlo, the former Chief Development Officer at Cisco (NASDAQ: CSCO). Keep in mind that he was apparently a candidate for the CEO spot.

Then today, Silver Lake announced big news -- the firm has entered a "long-term strategic partnership" with the California Public Employees' Retirement System (CalPERS). The transaction calls for a 9.9% stake in Silver Lake and there will likely be more investments in future funds.

No doubt, we will see other private equity firms move into the tech space. However, this is far from easy -- especially since Silver Lake is continuing to improve its 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 DealProfiles.com.

Silver Lake Partners gets a rich friend originally appeared on BloggingStocks on Wed, 09 Jan 2008 15:00:00 EST. Please see our terms for use of feeds.

Cisco CEO John Chambers announces management changes originally appeared on BloggingStocks on Fri, 21 Dec 2007 13:44:00 EST. Please see our terms for use of feeds.

The trend of private equity firms buying out high tech companies continues. According to Bloomberg News, Silver Lake Partners and TPG will take Avaya Inc. (NYSE: AV) private for $8.2 billion -- the biggest LBO of a computer networking firm ever.

Investors will receive $17.50 a share. That's 4.7% more than yesterday's closing price and 28% more than before speculation about a purchase surfaced on May 29.

This is the latest in a string of high tech LBOs. Recent ones include:

• Acxiom Corp. (NASDAQ: ACXM), this computer and database services provider, said May 16 it's being bought by Silver Lake and ValueAct Capital Partners LP for about $2.24 billion.
• Alltel Corp. (NYSE: AT) this fifth-biggest U.S. wireless service, agreed May 21 to be bought by TPG and Goldman Sachs Group Inc. (NYSE: GS) for $27.5 billion.
• CDW Corp (NASDAQ: CDWC) agreed on May 30 to be acquired by Madison Dearborn Partners LLC for $7.3 billion.

I am not sold on the competitive advantages that will result from this deal. Maybe there's some overhead to be cut but I question how much private equity is willing to invest in R&D to jump start Avaya's product pipeline.

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.

Silver Lake Partners and TPG take out Avaya originally appeared on BloggingStocks on Tue, 05 Jun 2007 11:00:00 EST. Please see our terms for use of feeds.

Private equity shifts gears to technology originally appeared on BloggingStocks on Tue, 05 Jun 2007 10:30:00 EST. Please see our terms for use of feeds.

On the one hand, activist hedge funds are taking positions in companies and trying to get them to sell out. Then, there are hedge funds that protest when a buyout offer is too low.

It's certainly getting confusing -- but it's all very interesting.

Take the $2.25 billion buyout of Acxiom Corp. (NASDAQ: ACXM).

As I wrote in a post on BloggingStocks last week, the company was the target of activist hedge fund ValueAct Capital Partners. Now, the hedge fund has joined private equity firm Silver Lake Partners for the going-private transaction.

Well, Acxiom's second largest shareholder -- Millbrook Capital Management, which is a hedge fund -- is not too thrilled with the buyout offer and plans to challenge it. according to a filing with the SEC.

It's a serious problem. After all, Millbrook has an 8% stake. Also, it's probably a good bet that there are other agitated hedgies in Acxiom's stock.

In fact, Millbrook thinks the stock is worth more that $35 per share.

Yes, that's much better than the $27.10 offer, and Wall Street is thinking a higher bid will come to the table, as the shares closed today at $28.04.

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

Acxiom buyout springs a leak originally appeared on BloggingStocks on Mon, 21 May 2007 18:24:00 EST. Please see our terms for use of feeds.

Acxiom agrees to $2.25 billion buyout offer originally appeared on BloggingStocks on Thu, 17 May 2007 12:52:00 EST. Please see our terms for use of feeds.

Back in December, Sabre Holdings (NYSE: TSG) announced a $4.45 billion buyout. The buyers included Silver Lake Partners and Texas Pacific Group (TPG). The price tag was a 30% premium over the past 60 trading days.

As almost ways happens, Sabre got served. There was a class-action suit as well as a derivative action lawsuit.

Did it increase the stock price? No.

But I'm sure it was lucrative for the attorneys.

This week, Sabre settled the litigation. Yes, this is something that seems to always happen. The suits are often nuisances and need to get cleared up before a deal gets done.

Although, one of the suits resulted in a reduction for the termination fee payble for TPG and Silver Lake. The fee will drop from $135 million to $80.

That's certainly a positive.

But, for the most part, I think these suits are really a nice gig for plaintiffs attorneys to rack up the fees. Add 'em to the big list of beneficiaries of the boom in private equity.

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

Private equity boom helps plaintiffs attorneys, too originally appeared on BloggingStocks on Tue, 27 Mar 2007 00:40:00 EST. Please see our terms for use of feeds.

Over the past few months, there has been a ton of takeover talk about Palm Inc. (NASDAQ: PALM). The company is certainly attractive. It has lots of cash and a strong global footprint. Today there was a report in Unstrung that says a deal could be wrapped up this week.

The buyers may actually be two major private equity firms: Texas Pacific Group and Silver Lake Partners. Of course, Palm would be a nice fit for a strategic party like Motorola Inc. (NYSE: MOT) or Nokia Corp. (NYSE: NOK). In fact, a deal with Motorola may actually quell some of the ardor of its big shareholder, Carl Icahn.

To add even more drama, Palm is going to report its earnings on the 22nd. Unstrung says the offer for Palm is likely to be above $20. And, given all the suitors, I think a high price is likely. Currently, Palm is trading at $19.01.

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

Palm's stock goes mobile again on takeover speculation originally appeared on BloggingStocks on Tue, 20 Mar 2007 13:22:00 EST. Please see our terms for use of feeds.

The biggest securities firm in Japan, Nomura Holdings, agreed to buy Instinet, which is an electronic trading firm.

It was last December that Silver Lake Partners, a private equity firm, purchased Instinet for about $208 million.

So, what did Nomura pay for Instinet? It hasn't been disclosed, but the rumor is that it was in excess of $1 billion.

If so, this would certainly qualify has a home-run deal.

But this does raise a big issue: Isn't a private equity firm supposed to fix-up and improve a company before it is sold off? Can this realistically be done in less than a year?

Well, I think this deal is a classic case of "good timing." With the onslaught of technology, stock exchanges are undergoing major changes. As a result, there has been an aggressive move to electronic approaches. It also helps that Instinet has a large list of hedge fund clients.

If a private equity firm can get a big return early, it's their duty to take it.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Private equity big-time payday on Instinet originally appeared on BloggingStocks on Fri, 03 Nov 2006 10:45:00 EST. Please see our terms for use of feeds.