Private Equity

UK $3 bln power LBO relies on big green reboot

5 Mar 2021

Aggreko, which rents out generators, agreed a deal with private equity buyers TDR and I Squared Capital. The company suffered from virus-hit event cancellations, and needs investment to ditch dirty diesel units. A green makeover may deliver a higher valuation, and juicy returns.

Capital Calls: OPEC+, Michaels

4 Mar 2021

Concise views on global finance in the Covid-19 era: Recovery concerns keep a lid on the oil cartel’s supply taps; Apollo tries its hand at craft retailer Michaels.

Capital Calls: Exxon, Greensill, Research SPAC

2 Mar 2021

Concise views on global finance in the Covid-19 era: U.S. securities regulators take on the oil giant; Investors in even lower-risk funds get nervy about the supply chain finance provider; And a supplier of picks and shovels to the online trading boom gets a blank-check listing.

UK engineer bets that buyers will pay dual premium

2 Mar 2021

Renishaw’s two octogenarian creators want to use their 53% stake to sell to an entity that keeps its “heritage and culture”. That might deter private equity, while the engineer’s 5 bln pound-plus valuation is beyond domestic trade buyers. That could mean a pretty short shortlist.

Private equity growth fetish stores up future pain

1 Mar 2021

Last year’s $592 bln of deals were done at near-record valuations, according to Bain & Co. The consultancy reckons buyout barons are increasingly reliant on boosting sales rather than cutting costs. Since fast-growing targets are scarce, and pricey, it’s a recipe for low returns.

Unizo mess could make Japan M&A less hospitable

1 Mar 2021

Less than a year since the hotelier’s $2 bln takeover battle, it is under pressure from the massive debt used to repay buyout backer Lone Star. An aggressive deal structure exacerbated pandemic risks. The danger is that Japan Inc’s more open-minded approach to deals closes again.

Capital Calls: CPPIB, Barclays, McPlant, DoorDash

26 Feb 2021

Concise views on global finance in the Covid-19 era: Canada Pension Plan Investment Board's CEO is booted for jab-line jumping; the UK bank wins a legal, if not ethical, victory over financier Amanda Staveley; Beyond Meat partners with McDonald’s and Yum; and DoorDash is too hot.

Drinks-can SPAC offers a healthier kind of bubble

23 Feb 2021

Packing firm Ardagh’s metal unit differs from some blank-check targets in that it’s profitable and tangible. The $8.5 bln valuation relies on punchy assumptions, but is less fizzy than, say, rockets or genetic testing. It’s the kind of thing SPACs need to build credibility.

Aussie bank deal leaves rarity value on the table

22 Feb 2021

Four lenders dominate Down Under. That ought to mean the second tier has to dig deep for mergers that help them compete. Yet at $1 bln Bank of Queensland is paying just over book value for ME Bank. It’s a reality check for the other targets no matter how digital-savvy they are.

Clayton’s new Apollo role is a non-spicy jalapeño

18 Feb 2021

The former SEC head is becoming lead independent director at the buyout firm, keeping an eye on sidelined founder Leon Black. In some companies, the role is used to avoid naming a separate board chair. In this case, it looks like a way of deferring the clean break Apollo needs.

Dyal deal hits pothole dug by uneven SPAC spoils

17 Feb 2021

The asset manager’s merger-and-go-public transaction is under legal threat from Sixth Street, an investment firm in which Dyal owns a stake and which claims it can block the tie-up. The real root of the rancor may be who wins financially in such deals and who doesn’t.

Nestlé, private equity find riches in water flush

17 Feb 2021

The $325 bln group is selling U.S. brands like Poland Spring to One Rock Capital and Metropoulos for $4.3 bln. The buyers get the assets on the cheap, at just 1 times 2019 sales. But the disposal helps Nestlé CEO Mark Schneider’s green goals and protects his premium valuation.

Capital Calls: Bubble alert

16 Feb 2021

Concise views on global finance in the Covid-19 era: Bitcoin burst through $50,000, and global fund managers are maximum bullish on the pace of the recovery from the pandemic.

Private equity ESG hoops are too easy to navigate

16 Feb 2021

Lower-rated companies and those controlled by buyout groups are issuing debt with interest payments linked to environmental, social or governance targets. But they’re too mild to change behaviour much. To have real teeth, their conditions need toughening up.

Bumble gratifies Blackstone’s lust for lucre

11 Feb 2021

After a 75% first-day IPO pop, the dating app is worth quadruple what it was when the private equity firm invested a year ago. Even if Bumble’s valuation settles nearer that of rival Match, Blackstone will have made a big paper profit. Its early flirtation with tech has paid off.

Son’s gene-sequencing goose may lay eggs elsewhere

10 Feb 2021

Pacific Biosciences has lagged goliath Illumina in selling DNA reading machines. A $900 mln investment from Masayoshi Son's SoftBank Group may give it a leg up. But competition will accelerate deflation in the price of gene sequencing, making users the biggest winners.

Capital Calls: Jay vs. Larry

10 Feb 2021

Concise views on global finance in the Covid-19 era: Jerome Powell takes on Larry Summers in the inflation debate.

EQT leaves hot markets behind with $15 bln pet LBO

10 Feb 2021

Instead of floating vet group IVC Evidensia, the buyout shop is selling it to its new fund, and Silver Lake. Stock valuations may be choppier when it finally lists, but the company’s rapid growth should help. Even in an IPO rush, private equity is hanging on to the best assets.

Swiss chemical buyout can just about wash face

9 Feb 2021

Bain and Cinven are paying drugmaker Lonza $4.7 bln for its skin sanitiser-ingredient unit. Aided by leverage, the pair should be able to eke out an acceptable return. But that hinges on changes to personal hygiene trends rather than just cost-cutting.

Capital Calls: Super Bowl, Poison pills, Experian

8 Feb 2021

Concise views on global finance in the Covid-19 era: America’s game doesn’t benefit from scarcity value; Cubic’s poison pill serves a purpose; And Brazil’s cyberattack has a price for Experian.