Private Equity

Thoma Bravo is riding the tech downturn

2 Aug 2022

Tech valuations are in freefall amid a darkening economic picture, leaving private equity buyers to sift through the wreckage. In this episode of The Exchange podcast, Thoma Bravo managing partner Seth Boro explains how his firm is navigating the market shift.

FOMO will be private equity’s saving grace

13 Jul 2022

The appetite to commit to new buyout funds is waning as declining public market valuations make pensioners and others overweight in private holdings. Spiraling requests from the likes of KKR may make investors want to retrench. But post-crisis bargains are too good to pass up.

SoftBank’s Fortress sale calls for an interloper

13 Jul 2022

The Japanese tech conglomerate may sell the asset manager to Abu Dhabi’s Mubadala wealth fund. The mooted price tag of over $1 bln looks embarrassingly cheap. SoftBank’s recent investing mishaps, like Klarna, should make boss Masayoshi Son open to a higher offer.

Twitter may be target for non-Musk deal

12 Jul 2022

The arrangement that the social media firm struck with Tesla’s boss for $54.20 a share was just too expensive – and with the wrong person. Based on its bankers’ own approach, the stock is worth closer to $32, and it’s near that price. Other private buyers might be interested.

Breakdown: Private credit’s main threat is itself

7 Jul 2022

Direct lenders like Ares or Apollo are displacing banks and investors when funding buyouts. Breakingviews explains how more flexible and generous lending terms helped these upstarts grab market share. As credit markets turn, the $1.2 trln industry’s success could be its weakness.

Private LBO lenders find zen amid the storm

5 Jul 2022

Firms like Blackstone are providing debt for buyouts even as banks pull back. Fallen tech star Zendesk is one beneficiary. The logic for lenders may be takeover targets’ steady revenue and scope for cost cuts. The pressure to deploy $390 bln in unspent capital can’t hurt either.

KKR-led hospital deal calls for surgical precision

5 Jul 2022

To make a $14 bln buyout of Ramsay Health Care work may involve amputating parts in Europe and a tricky sale and leaseback operation. And since due diligence started back in April, higher interest rates and a new Australian government further complicate the delicate procedure.

Private equity’s short-termism has a rising cost

23 Jun 2022

Volatile markets mean firms like Blackstone and KKR will increasingly have to sell assets to each other and themselves before funds expire. Such deals layer on extra costs and can have iffy governance. Investment vehicles with longer lives is one solution for the $3 trln sector.

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

Euromoney offers warm glow in buyout freeze

21 Jun 2022

The London-listed financial data and events firm is evaluating a $2 bln takeover offer from a private equity consortium. Despite a chunky premium, the buyer can make a decent return with a modest margin boost and limited debt. These qualities may yet attract other bidders.

Pete Stavros and his equity-for-all quest

31 May 2022

The KKR partner started the non-profit Ownership Works to help companies grant stock to entire workforces. He discusses the resistance, the success stories, and an ambitious plan to create $100 bln of wealth for employees on this episode of The Exchange podcast.

Market rout throws off math for open deals

18 May 2022

Unlike Twitter, whose shares dived on Elon Musk’s waning enthusiasm for his $44 bln offer, other stocks pending a deal are down on little news. Market pain changes the math for arbitrageurs as target shares may drop further if mergers fail. A Breakingviews calculator shows how.

Musk coinvestor roster underwhelms multiple ways

5 May 2022

Placing money alongside the world’s richest man should be an easy pitch. But tech heavyweights backing his $44 bln Twitter bid with $7 bln still leave a hole, and checks from smaller investors suggest he was scraping the barrel. It indicates skepticism about Musk’s latest idea.

Capital Calls: Amazon and consumers

29 Apr 2022

Concise views on global finance: People are spending more amid price hikes, while the e-commerce giant struggles with them.

UK grocer buyout creates bond market indigestion

29 Apr 2022

Banks led by Goldman and BNP Paribas that funded CD&R’s $9 bln Morrisons buyout have sold a chunk of the debt at a big discount. Inflation and a supermarket price war mean bondholders can now name their price. The debt hangover may make other deals trickier.

Chinese buyout baron’s dissent challenges Beijing

29 Apr 2022

Shan Weijian, a frequent defender of Xi Jinping’s tough policies, broke ranks to warn of an economic crisis and discontent from lockdowns. It adds risk to the IPO of his firm, PAG, but making an example of him would be tricky. His sentiments are shared in the financial community.

Musk wealth pours in as fast as Twitter can use it

22 Apr 2022

The Tesla CEO may need to find $33 bln more cash if he buys the social media company. That could require him to sell most of his shares in the electric-car maker that aren’t pledged against loans. But with more vast stock awards coming his way, it’s less risky than it looks.

Capital Calls: KKR and Australia, Danone

20 Apr 2022

Concise views on global finance: The private equity firm’s offer for Ramsay Health Care would almost double Down Under M&A by value this year; the French consumer group’s sales growth boost is offset by inflation fears.

Capital Calls: Blackstone backs perpetual students

19 Apr 2022

Concise views on global finance: The private equity firm is buying a campus housing investment vehicle for $12.8 billion. Steady cash flows and the need for more dorms make it a nice fit for Blackstone’s permanent capital vehicles.

Twitter’s habitat lacks natural predators

18 Apr 2022

Elon Musk’s $41 bln bid has put the social network in play, but closing a deal is harder. The Tesla boss may struggle to recruit partners, while meager earnings make it a stretch for private equity. Tech giants face antitrust concerns and toxic content will put off media suitors.