Private Equity

Breakingviews’ imaginary SPAC one-ups hedgie stars

20 Aug 2020

Blank-check firms launched by Bill Ackman, Dan Loeb and others create stiff competition for Breakingviews’ $500 mln offering. But previous successes don’t always translate. Our track record is strong, we have no conflicts, our fees are lower. Herewith, the (theoretical) pitch.

Corona Capital: Nvidia, Air conditioners

20 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: Nvidia goes gangbusters, HVAC units have their moment in the sun.

Sickly Japanese buyout gets even queasier

18 Aug 2020

Medical staffer Nichiigakkan’s $1.2 bln deal with Bain was already riddled with governance ailments before Baring Private Equity disclosed that its approach worth 20% more had not been given proper attention. A shareholder backlash at this stage could open fresh wounds.

Helping private equity is necessary Covid-19 evil

17 Aug 2020

The UK government may offer loans to some highly leveraged companies that are owned by buyout barons. Aiding the latter feels perverse. But protecting jobs is the right priority. Authorities have had decades to fix PE flaws. The best they can do for now is to limit profiteering.

UK LBO jalopy offers buyout barons last wild ride

14 Aug 2020

Roadside repair group AA is drawing interest from private equity again. It’s still crippled by a 2.7 billion pound debt load from past takeovers. With a cash injection and thorough service, a new driver could make a decent return, but it would still be a risky journey.

Corona Capital: U.S. Jobs, Drugs

7 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: More Americans went back to work in July, though it’s a slowdown from June and Washington is still dithering over job relief aid; and President Trump wants to bring pharmaceutical production back home.

Blackstone adds to Ancestry’s dog-show lineage

6 Aug 2020

Stephen Schwarzman’s firm is the latest well-heeled, but somewhat interchangeable private-equity owner of the genealogy site. Steady cash flow and an aging population explain the continuing appeal. Pandemic boredom presents a new opportunity, but at a hefty $4.7 bln valuation.

Private equity firms work to get a little credit

5 Aug 2020

KKR’s debt business underperformed buyouts in the last 12 months. But the company's stock – although overshadowed by Apollo, the most credit-heavy – has done well. The scalable business brings lower returns for fund investors, but is good for the management firms themselves.

Walmart’s UK exit will be priced to sell

24 Jul 2020

The $375 bln retailer is once again trying to flog a stake in its British chain Asda. Convincing an investor to match the $9 bln J Sainsbury offered in 2018 looks fanciful given weak growth, Brexit risks, and the legacy of the pandemic. The main appeal may be a willing seller.

Carlyle completes the first of two bake-offs

21 Jul 2020

The investment firm has gone from co-CEOs down to one, naming Kewsong Lee to run the business. That’s helpful – with its founders also sharing control, Carlyle looked crowded. It might also help in another, wider contest: Carlyle’s stock has trailed peers KKR and Blackstone.

Goldman’s Permira punt looks better for the target

21 Jul 2020

The U.S. bank is taking a 10% stake in the buyout shop for $500 mln. Permira is recovering after a tricky period and the sale values it at a lower multiple than rivals. But unlisted players merit discounts, and access to Goldman’s network may mean the seller gets the better deal.

Private equity helps CalPERS mature

16 Jul 2020

The $400 bln U.S. pension fund posted a 4.7% return for the year to June 30. It's one hint of the challenge of hitting its long-term 7% target. Moving deeper into buyout investments and using leverage to manage liquidity and risk should help the California outfit get closer.

Sweden’s $2 bln oat milk startup has watery moat

16 Jul 2020

Oatly, which makes the dairy substitute loved by hipsters and baristas, raised capital from Blackstone and celebrities including Oprah Winfrey. Sales reached $200 mln in 2019 and are expected to double again this year. But its lead could sour as bigger groups like Danone wade in.

Europe’s private-equity share premium is temporary

16 Jul 2020

Sweden’s EQT and Swiss Partners Group fetch price-earnings multiples way above KKR, Blackstone, Carlyle and Apollo. That’s justified by faster growth and a higher proportion of management fees, which are more predictable than carry. As the newer funds mature, that will erode.

Takeda feeling uncomfortable Shire side effects

13 Jul 2020

The Japanese drugmaker is near a deal that would get it to a $10 bln divestiture target 18 months after buying its Irish rival for $62 bln. Promised cost savings are materialising and debt slowly shrinking. Weak stock performance under boss Christophe Weber suggests he overpaid.

KKR’s Kravis pulls a Buffett with insurance deal

8 Jul 2020

The $26 bln buyout firm will buy Global Atlantic for its book value, currently $4.4 bln, multiplying its so-called permanent capital – an investing trick mastered by the Sage of Omaha. Wednesday offers a tale of two deals: Allstate’s similar-sized purchase looks less disciplined.

Corona Capital: Disney/“Hamilton”, U.S. housing

6 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: “Hamilton” reinvigorates Walt Disney’s digital-download challenge, and America’s stay-at-home rules may mean there’s pent-up demand for real estate and home improvement.

Carlyle hedges Indian link in pharma supply chain

30 Jun 2020

The buyout firm is taking a 20% stake in Ajay Piramal’s contract drugmaker at a healthy $2.8 bln valuation, ahead of a planned carve-out from its lending-focused parent. The division can benefit from a worldwide reshoring push. Short-term concerns explain the fiddly deal terms.

German lift LBO hits ceiling on lax lending

29 Jun 2020

Advent and Cinven, who paid $19 bln for Thyssenkrupp’s elevator unit, had to tweak terms for the deal’s funding after an investor revolt. Rock-bottom interest rates give buyout groups a strong hand with creditors. After the Covid-19 crisis, however, lenders’ tolerance has limits.

Albertsons owners take shopping cart to the ankles

26 Jun 2020

The supermarket chain’s IPO raised 40% less than it hoped, pricing below the range set just a week earlier. The final valuation looks fair, suggesting the market is working as it should. It's a good outcome for investors, though not so much for Albertsons backers and advisers.