Private Equity

New deals put equity back into private equity

12 Oct 2022

Vista unveiled a $4.6 bln takeover of KnowBe4 while Thoma Bravo is paying $2.3 bln for ForgeRock. There’s precious little detail about the financing for either security software developer, but both transactions offer hints about how buyout firms will navigate tight debt markets.

A private lender eats buyout bankers’ lunch

11 Oct 2022

With public debt markets shut, funds that help finance leveraged buyouts and other deals have become the only game in town. In this episode of the Exchange podcast, Blue Owl co-founder Marc Lipschultz explains how private credit has muscled in on investment bankers’ home turf.

Cheerios can eat VCs for breakfast

28 Sep 2022

General Mills’s investment in food platform GrubMarket looks speculative. But manufacturers from United Airlines to General Motors have made similar bets. The cereal company doesn’t have to answer to capital providers like VCs do. With valuations falling, it’s not a bad idea.

Goldman’s buyout push casts shade on its home turf

28 Sep 2022

The bank’s $10 bln buyout fund puts it back in the arena with the likes of Blackstone. Being both adviser and investor benefits the firm’s shareholders. But banking clients may not like Goldman cornering the market, and past lessons show crossing the streams can cause tension.

Capital Calls: Apple tests discretionary spending

28 Sep 2022

Concise views on global finance: The company’s reversal on iPhone 14 production is a sign that inflation-battered consumers are thinking differently about discretionary items.

CVC’s burial business bets on lively market growth

27 Sep 2022

The buyout shop is mulling offers for Nirvana, a Southeast Asian funeral services outfit offering family plots. A sale for up to $2 bln, almost double what it paid, would imply robust demand for financial planning. Asia’s booming life insurers underscore the opportunity in death.

Elliott’s double dip spares Citrix banks’ blushes

22 Sep 2022

Paul Singer’s hedge fund has made an unusual bet, picking up $1 bln of bonds backing its own buyout of cloud firm Citrix. The banks get shot of a balance-sheet albatross. And by getting a big discount on debt issued in a frothy market, Elliott benefits from their pain twice over.

Bank of Cyprus bid makes case for lender buyouts

22 Sep 2022

Lone Star offered 700 mln euros for the Mediterranean group. It could probably make a good return even if it paid much more. Growing interest from private equity puts other beaten-up minnows on notice, and could be a boon for unwieldy giants in need of pruning, like SocGen.

Aussie dealmakers face embarrassment of ditches

13 Sep 2022

KKR’s $14 bln Ramsay pursuit is on life support. Toll-road owner Atlas Arteria’s top investor may go activist over its $2 bln purchase of Chicago Skyway. And a UK watchdog may scupper Link’s takeover saga. Fears of value destruction are jeopardising deals once seen as sure bets.

Capital Calls: ECB rate hike

8 Sep 2022

Concise views on global finance: Europe’s central bank risks recession to combat inflation.

BlackRock could be Carlyle’s succession strategy

7 Sep 2022

The $11 billion private equity firm is a sitting duck now that it doesn’t have a permanent CEO. Its founders may not want their legacy to be a sale to a rival. But Larry Fink’s firm would benefit from more alternative assets, and languishing Carlyle could use a rescuer.

Thoma Bravo is teacher’s pet, for now

31 Aug 2022

The buyout firm looks to have more than tripled its investment in a school software firm partly because it sold to a strategic buyer at a very high multiple. That valuation might help explain other aggressive tech LBOs. But for Thoma, and others, it’s more likely a one-off.

Zendesk’s deal ping-pong favors caution

29 Aug 2022

Hedge fund Light Street is using Icahn-esque tactics to fight the software maker’s $10 bln LBO. It’s pitched as a way for public investors to take part in a turnaround. But financing, governance, growth, and cost uncertainty make the plans look like a pipe dream.

Buyout investors are heading for a cash crunch

23 Aug 2022

The $2 trln industry’s backers, such as pension funds, often rely on past profits to meet calls for fresh capital from KKR and others. But that doesn’t work in a slump. Since alternative cash-raising methods are costly, private equity’s appeal as an asset class may take a hit.

Cash buyers have whip hand in London office slump

17 Aug 2022

The value of the UK capital’s buildings could fall 12% in the next 18 months, Bank of America reckons. But private equity houses will struggle to swoop as high interest rates make debt-fuelled purchases uneconomic. Cash-rich pension funds will put a floor on price declines.

Capital Calls: Adam Neumann’s new venture

15 Aug 2022

Concise views on global finance: Venture capital firm Andreessen Horowitz funnels $350 mln into the WeWork founder’s real estate startup.

Carlyle’s next gen needs to be more than its CEO

8 Aug 2022

Boss Kewsong Lee stepped down at the $14 bln asset manager and co-founder Bill Conway will be in charge as they look for a replacement. That’s a step back in Carlyle’s transition. Success hinges on finding a leader who, like the business, is a commodity not a star.

Barbarians’ tax win is another point for the 1%

5 Aug 2022

A bid to curb a U.S. loophole that allows buyout managers to pay less in taxes was dropped in a climate bill that looks set to pass. The industry has beaten back similar efforts before. Barons have gone from shaking up companies to barreling through Washington.

Private equity needs more other-people’s-money

4 Aug 2022

Firms like Blackstone and KKR have $1.4 trln in funds burning a hole in their collective pocket. But they need debt to juice up their equity investments. With loan markets in turmoil, and direct lenders potentially facing constraints too, the mountain of dry powder may stay dry.

Thoma Bravo pulls out its inflation-era playbook

3 Aug 2022

The private equity firm’s purchase of security software maker Ping Identity for $2.4 bln fits the thesis behind many of Thoma Bravo’s recent deals: Companies that are expanding can still use stern cost discipline. The question is whether cuts come at the expense of future growth.