|
Cornerstone
Equity Sells Label Maker Vestcom
International
Cornerstone's
determination to get a good sale price - despite issues with one of
Vestcom's customers that complicated the auction - paid off, as the
company ultimately fetched the firm a 3.2 times return. The buyers
are Stephens Group - which has deep ties with Vestcom - and
Lake
Capital.» |
|
Allied
Capital Sells Mercury Air Centers For
$427M
The
company did six add-on deals and brought in a new CEO under Allied's
leadership.»
Gores Group
Does First Health Care Deal
The
firm is buying Healthsouth's diagnostics division for $47.5 million
in a baby boomer play.» |
LBO-Backed
Beauty Schools Co. Puts On A New
Face
Key
Principal has a 24% stake in Empire Beauty, which will boost school
count to 88 from 37 with this deal.»
Goldman
Invests In Big Names With $500M Energy
Fund
The
fund, even though it is still being raised, has already committed
some $350 million.» |
Cornerstone Equity Sells Label Maker Vestcom
International
4/20/2007
– Cornerstone Equity Investors
LLC sold Vestcom International Inc. for $158 million to two other private
equity firms, returning 3.2 times its money from the maker of shelf labels
for supermarkets and drugstores.
The buyers -- The Stephens Group
LLC and Lake Capital -- won an auction that was complicated last fall
after one of Vestcom's top customers, Albertson's Inc., changed hands and
began shedding locations, said Cornerstone Equity Managing Director
Steve Larson.
Potential
suitors became wary of Vestcom's growth prospects as the supermarket
chains' new owners, an investment group led by Cerberus Capital
Management, sold some 180 locations and initiated plans to shutter another
125, he said. Bids came in below Cornerstone Equity's expectations, and
the sale process was delayed as Vestcom launched new accounts with
Walgreen Co. and Safeway Inc.
The company re-engaged the Stephens
Group, one of its initial suitors, in exclusive talks earlier this year as
those accounts began to bear fruit.
"We were trying to get a
premium price," Larson said. "(Potential buyers) needed to be convinced
that the growth was there."
Stephens Group General Counsel Ron
Clark said his firm was drawn to Vestcom's "strong market share," with a
client list that includes retailers like Target Corp., Kroger Co. and
Dollar General Corp.
The buyout firm also has deep ties with
Vestcom. Their headquarters are located about 15 minutes away from each
other in Little Rock, Ark. Stephens Group Senior Principal Rick Turner
went to school with Vestcom President and Chief Operating Officer
Tim McKenzie at the University
of Arkansas, and also attends the same church. Stephens Group Principal
Kent Sorrells' uncle was an
initial investor in Vestcom when it was founded in 1969.
The
executives' familiarity with each other made for a smooth negotiating
process, although Stephens and Lake
didn't get any favors when it came to a valuation, Larson said.
"We sold it for the best price we could get," he said.
Stephens Group decided to bring Lake Capital into the deal because it
wanted a partner with lots of experience in the retail services industry,
Larson said. Lake Capital is a veteran in the space,
with a current investment in Storecast Merchandising Corp., which provides
merchandising services in retailers.
Vestcom's shelf labels range
from simple strips that have a barcode and price, to larger tags that
feature advertisements, promotional and nutrition information. It also
recently started marketing tiny shelf monitors that broadcast 30-second
ads and sound clips.
The company is on track to post $120 million
in revenue this year, up from $115 million in 2006. It processes up to 100
million labels a week from nine locations around the country.
It
had more than 30 locations and provided marketing and business
communication services to financial and insurance entities when
Cornerstone Equity took it private in 2002.
That deal was worth
about $85 million, with Cornerstone Equity investing nearly $36 million of
equity, according to regulatory filings.
During the last five
years, Cornerstone Equity has consolidated the business services arm while
focusing on building up the retail labeling business, which the firm felt
had the strongest growth potential. It sold the business services arm last
year to Bowne & Co. for $30 million in cash, using the proceeds to
take out a dividend and pay down some of Vestcom's debt.
Vestcom
was advised by Robert W. Baird & Co. in the sale.
Reach
Cornerstone at 212-753-0901; Stephens Group at 877-891-0091; Lake Capital at 312-640-7050 and Vestcom
at 501-663-0100.
http://www.cornerstone-equity.com
http://www.stephensgroup.com
http://www.lakecapital.com
http://www.vestcom.com
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Allied Capital Sells Mercury Air Centers For
$427M
4/20/2007
– Allied Capital Corp. has agreed
to sell Mercury Air Centers Inc., which refuels and provides other
services to non-commercial jets while grounded, to Macquarie
Infrastructure Co. for $427 million, more than five times what Allied paid
for the company in 2004.
The publicly traded buyout firm said that
it stands to book a gain of about $240 million on its equity invested,
although it didn't provide cash-on-cash or internal rates of return on the
deal.
Allied Capital is pleased with the investment, said Dan
Russell, an Allied managing director. The firm helped triple Mercury's
earnings before interest, taxes, depreciation and amortization after
establishing it as a standalone company.
Previously, Mercury Air
Centers had been part of the publicly traded Mercury Air Group, which sold
it to Allied in 2004 for $83 million to pay off some of its
debt.
The company's growth was helped with six add-on acquisitions
that put Mercury Air Centers locations at three additional airports while
expanding its presence at others, Russell said. Mercury Air Centers also
brought in a new chief executive, Ken Ricci, and other members of senior
management to guide the company.
In buying Mercury Air Centers,
Allied Capital was betting that increasing orders for private and
corporate jets, as well as an increase in fractional ownership of
aircraft, would drive the need for Mercury's services.
That trend
continued in 2006 when 4,042 general aviation airplanes were shipped, an
increase of nearly 13% from the previous year's total of 3,580 units,
according to the General Aviation Manufacturers Association. General
aviation includes all non-military and non-commercial jets.
With
headquarters in Richmond
Heights, Ohio,
Mercury Air Centers largely sells fuel to jets that pull into its
fixed-based operations (FBOs) and also offers other services while the
plane is grounded like de-icing, catering and cleaning. It currently has
24 FBOs at 22 airports nationwide. In addition to its Mercury Air Centers
brand, the company operates under the names Corporate Wings, First Air and
IX Jet Centers.
The company's financials were not disclosed
although Macquarie said that Mercury
would generate in excess of $25 million of Ebitda in the year following
the sale.
The operations of Mercury Air Centers are expected to be
combined with the Dallas-based Atlantic Aviation, which Macquarie
Infrastructure Co. already owns. The combination will create a company
with over 60 FBOs in North America.
Of the $427 million sale price, about $10 million of proceeds due
to Allied are subject to holdback provisions. Allied expects to be repaid
another $50 million of debt outstanding to Mercury at closing. The deal is
expected to close in the third quarter and the purchase price is subject
to adjustments.
Reach Allied Capital Corp. at 202-331-1112.
http://www.alliedcapital.com
http://www.fuelondemand.com
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Gores Group Does First Health Care
Deal
4/20/2007
– The Gores Group has struck its
first health care deal, agreeing to buy the diagnostic division of
HealthSouth Corp. for $47.5 million.
The deal, which the buyout
firm landed through an auction, is expected to close by the end of
June.
The firm started looking at the asset about a couple of
months ago and found it compelling because it was a "technology-driven,
services-oriented" business, said Frank Stefanik, a partner with Gores
Group.
The firm hopes to do more deals in the health care services
sector to cash in on the growing demands of an aging population, he said.
The diagnostic division includes a network of 54 freestanding
imaging centers in 19 states and the District of Columbia. About 80% of the
centers provide a combination of outpatient diagnostic imaging services,
like MRIs and ultrasounds. The remaining ones are specialty
labs.
Healthsouth sold the division as part of its efforts to
reposition itself as a post-acute health care business, focusing on
inpatient rehabilitative services.
Deutsche Bank Securities served
as HealthSouth's financial adviser for this transaction.
Gores
Group sees the business as a solid platform to grow organically and
through add-on acquisitions, Stefanik said. He declined to comment on the
division's financials, except to say that it has been doing
well.
The investment came out of the firm's first fund, which
closed in 2001 with $500 million in commitments. The Los Angeles-based
firm is currently raising its second fund with a $750 million target, LBO
Wire previously reported. It typically invests in technology, business
services and industrial components sectors.
Reach Gores Group at
310-209-3010.
http://www.healthsouth.com
http://www.gores.com
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LBO-Backed Beauty Schools Co. Puts On A New
Face
4/20/2007
– Empire Beauty Schools Inc., a
beauty schools operator that is minority-backed by Key Principal Partners,
is bulking up in size, taking on 51 cosmetology schools from
publicly-traded Regis Corp.
Regis will have a 49% stake in Empire
Education Group, as the new company will be known, with Empire Beauty's
shareholders retaining the rest. Key Principal hasn't yet decided whether
to sell or roll over its 24% stake, said Frank Schoeneman, chairman and
chief executive of Empire.
Partners at Key Principal did not
return calls seeking comment.
The deal was negotiated directly
between Regis and Empire's management, which had been seeking to end the
competition between the schools, Schoeneman said. Specific financial terms
weren't disclosed.
The combined Empire Education will own 88
accredited cosmetology schools, generating some $160 million of revenue in
2007, Schoeneman said. That's up from 37 schools and annual revenue of $63
million currently. Most of the schools owned by the two companies
complement each other, said Schoeneman.
In addition, there are
other synergies with Regis that Empire Beauty hopes to cash in on, such as
cross-promotion of hair products at Empire's schools and career
opportunities for trained students at Regis Corp., said Schoeneman.
Key Principal bought its stake in 2004 for $16 million, Schoeneman
said. Since its investment, the company has grown by expanding its
schools, which teach students skills in hair styling, skin care, nail care
and massage, into new geographic locations, like Chicago, New York
and Boston.
Reach Key Principal at
216-828-8125.
http://www.keyprincipalpartners.com
http://www.empire.edu/
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Goldman Invests In Big Names With $500M Energy
Fund
4/20/2007
– Goldman Sachs Asset Management
Private Equity Group, the private equity fund-of-funds arm of the
investment banking giant, is almost done raising - and investing - its
$500 million Goldman Sachs Concentrated Energy Fund, according to a
limited partner.
The New York-based manager has already invested
some $250 million to such funds as Quantum Energy Partners IV LP, First
Reserve Fund XI LP, Energy Capital Partners I LP and Carlyle/Riverstone
Global Energy Power Fund III LP.
The fund of funds also does
direct investing, and is allowed to commit at least 25% of the total
raised to direct deals. So far, Goldman Sachs has invested $100 million to
Quantum Resources A1, $12 million to FirstLight Power Resources Inc.,
formerly NE Energy Inc., owner and operator of predominantly
hydro-generation plants in Connecticut
and Massachusetts; and $20 million to
Niska Gas Storage, an independent natural gas storage company in
North America.
Niska Gas Storage
is a holding company that Carlyle/Riverstone Global Energy & Power
Fund III formed after acquiring the first chunk of publicly-traded EnCana
Corp.' natural gas storage operations in May for $1.3 billion, said Paul
Amirault, senior vice president of Niska Gas. Carlyle/Riverstone completed
its $1.5 billion acquisition of EnCana Corp.'s gas storage business in
November.
No further information could be found on Quantum
Resources A1.
Goldman Sachs declined to comment.
Goldman
Sachs Concentrated Energy Fund invests in a natural resources niche and
focuses on the oil, gas, coal, power, energy infrastructure and
energy-services sub-sectors.
Though the fund of funds is close to
being fully committed, it is still taking in LP commitments, including one
from the Ohio State University, which approved a $10
million allocation last month. It's not clear when Goldman began raising
the fund of funds.
This strategy allows LPs to view the fund in
action, which helps when a vehicle is a first-timer. This is Goldman
Sach's first concentrated energy fund. It also mitigates the J-curve
effect, a thorn in the side of many LPs, by reducing the wait for
distributions.
The Goldman Sachs name also helps, given that the
private equity group utilizes the firm's network and resources to source
and analyze potential investments efficiently.
According to one
LP, Goldman Sachs Concentrated Energy Fund will charge a 1% management fee
for the first five years. Starting in the sixth year, the management fee
will be 75% of the previous year's fee. Also, a performance fee of 5% of
investment profits and 15% of direct investment profits will be charged,
but only after investors receive 100% of their capital contributions plus
an 8% annual return.
The GP commitment is 5%, and the term of the
fund is 10 years. The investment period is two years, according to the LP.
The private equity group manages $18 billion in committed assets
across four fund programs: diversified, secondary, technology and
distressed funds of funds.
Reach Goldman Sachs at 212-902-1000.
http://www2.goldmansachs.com
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Mid-market
/ New
York
Wicks Group Puts Horse Racing Magazine On The
Block
4/20/2007
– Amid a hot market for special
interest media, The Wicks Group of Cos. has put its Daily Racing Form LLC,
publisher of the horse racing magazine by the same name, on the block.
The firm has hired Credit Suisse Securities to explore strategic
alternatives for the company including a sale process.
Daily
Racing Form, founded in 1894, is currently the only national daily print
publication dedicated to horse racing. The magazine also has a Web site.
The company's financials were not disclosed, and Wicks Managing Partner
Craig Closk declined to comment on specifics.
Wicks acquired the
magazine from Alpine Capital Group in 2004 for an undisclosed
sum.
The magazine could receive interest from media-savvy private
equity firms, particularly from the ones that own special interest media
companies.
The sector has attracted interest because of the steady
revenue such assets generate. Wind Point Partners backs a platform called
Active Interest, which owns such titles as American Cowboy and Yoga
Journal; Spectrum Equity Investors backs Apprise Media, which publishes
Bow and Arrow Hunting and Victorian Homes; and ABRY Partners and
Providence Equity Investors back F&W Publications, which publishes
Antique Trader and Big Reel.
Reach Wicks Group at 212-838-2100.
http://www.drf.com
http://www.wicksgroup.com
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Aeroflex Gets Rival Offer From Veritas
Capital
By
Staff Reporters
4/20/2007
– Aeroflex Inc., which agreed to
be bought out by two private equity firms for $1 billion last month, has
received a higher rival offer from Veritas Capital.
However, the
Plainview, N.Y., maker of automated testing
services said its $13.50-a-share buyout agreement with General Atlantic
and Francisco Partners remains in place.
The company, which had
until April 18 to solicit other bids, received a proposal from Veritas
Capital for a leveraged recapitalization in which stockholders would
receive a cash dividend of $14 and retain 21.2% of the fully diluted
common equity.
New York-based Veritas Capital would control the
rest of the equity.
Aeroflex is to pay a break-up fee of up to
$22.5 million to General Atlantic and Francisco Partners if it accepts
another offer under the buyout agreement they announced March 5.
Reach General Atlantic at
203-629-8600 and Francisco Partners at 650-233-2900.
http://www.veritascapital.com
http://www.franciscopartners.com
http://www.generalatlantic.com
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National Home Health Considering Competing Offer
To Angelo Gordon's
4/20/2007
– National Home Health Corp.
plans to pursue a revised $12 dollars-a-share cash buyout offer from
Premier Home Health Services Inc.
The company had rejected another
$12 per-share offer in February because the original offer was
conditional.
The Scarsdale, N.Y., company said its board's special
committee unanimously voted that the new offer could be expected to lead
to a superior proposal, compared with the previous offer from Angelo
Gordon & Co. of $11.35 a share to $11.50 a share.
The board
accepted the committee's proposal.
National Home Health's shares
ended trading down 8 cents, or 0.7%, at $11.62.
Reach Angelo
Gordon at 212-692-2000.
http://www.angelogordon.com
http://www.nhhc.net
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Jeweler M Fabrikant & Sons Seeks Judge's OK To
Auction Assets
4/20/2007
– Diamond wholesaler M. Fabrikant
& Sons Inc. has asked a judge for permission to begin enticing bidders
for an auction of its assets slated for early May.
The request,
filed with the U.S. Bankruptcy Court in Manhattan on Tuesday, solidifies the
company's earlier assertions that it may liquidate rather than reorganize.
Under the auction plan, privately held M. Fabrikant would sell all
its assets, including inventory, accounts and intellectual property. It
would then file a liquidation plan with the court.
Under the
proposed auction rules, any stalking-horse, or lead bidder, would be
offered payment for fees and costs worth up to 2% of the bid or $200,000,
if the offer lost at auction.
The judge overseeing the jewelry
company's bankruptcy case will decide whether to approve the rules at a
hearing on April 26.
M. Fabrikant has been under Chapter 11
protection since Nov. 17, after lenders "froze" its bank accounts. Lenders
include ABN Amro Bank, Antwerpse Diamantbank, Bank of America, HSBC Bank
USA, Israel Discount Bank of New
York, JP Morgan Chase and Sovereign Bank.
Fabrikant owed lenders about $161.9 million as of December.
The
112-year-old New
York company is one of the world's largest
manufacturers and distributors of diamonds and gemstone jewelry. It could
draw interest from private equity firms, which have been active in the
retail jewelry industry in recent years.
For instance, Waltham
Mass.-based DDJ Capital Management last year sold Samuels Jewelers Inc. in
December to Gitanjali Gems Ltd. DDJ Capital bought the Austin, Texas-based
chain out of bankruptcy in 2004 and turned it around shedding some
location. Also last year, Fenway Partners sold its minority stake in
jeweler Harry Winston to Aber Diamond Corp., fetching $99 million after
seven years of ownership.
M. Fabrikant & Sons owns 81% of
domestic unit Fabrikant-Leer International Ltd., which is also in Chapter
11. Fabrikant directly and indirectly owns over 40 companies in 10
countries.
Reach M. Fabrikant at 212-757-0790.
http://www.fabrikant.com
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Large
/ Kennett Square,
Pa.
Genesis Healthcare: Buyout Offer Raised To
$64.25/Shr
By
Staff Reporters
4/20/2007
– Genesis HealthCare Corp. said
it has amended its merger agreement with affiliates of Formation Capital
LLC and JER Partners to increase the cash portion payable to Genesis
shareholders to $64.25 per share from $63. The transaction is now valued
at $1.7 billion, including the assumption of roughly $475 million in debt.
In addition, under the amended agreement, the termination fee has
been reduced to $15 million from $50 million.
The original deal
was announced Jan. 16. Genesis shareholders will vote on the new agreement
on May 4.
Kennett Square, Pa.-based Genesis operates skilled
nursing centers and assisted living residences.
Genesis shares
were halted prior to the announcement.
Reach Formation Capital LLC
at 770-754-9660 and J.E. Robert at 703-714-8000.
http://www.jer.com
http://www.formationcapital.com
http://www.genesishcc.com
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ION Media Holder Zeiger Supports NBC-Citadel
Revised Offer
4/20/2007
– Investor Steven Robert Zeiger,
holder of a 5.7% stake in Ion Media Networks, said that he supports an
amended buyout offer made by NBC Universal Inc. and hedge fund Citadel
Investment Group.
Zeiger said in a filing with the Securities and
Exchange Commission that he intends to recommend to Ion's board that it
accept NBC-Citadel's modified proposal and enter into a definitive
agreement.
As reported, Ion Media is mulling various restructuring
offers, including the one from Citadel with support from NBC, which holds
a controlling interest in Ion Media. NBC is majority-owned by General
Electric Co.
The other proposal is from a group of Ion Media
preferred stockholders, who have complained that the Citadel offer
shortchanges them and have submitted their own recapitalization plan for
the company.
The New York Post reported that some of the preferred
shareholders have privately threatened to sue Ion's board members if they
accept the NBC-Citadel offer.
NBC and Citadel first proposed a
restructuring plan in January and have twice revised their offer, most
recently on April 11. Their latest revision calls for a cash injection of
$100 million into the TV broadcaster formerly known as Paxson
Communications. The deal raises the price paid to some preferred holders
and gives them a potential stake in the private company.
NBC and
Citadel said that if a tender offer is launched by May 4, tendering
shareholders would receive $1.45 per share in cash.
Reach Ion
Media Networks at 561-659-4122.
http://www.citadelgroup.com
http://www.ionmedia.tv
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Group Vying For Delphi Set To Move
Ahead
4/20/2007
– Appaloosa Management intends to
move forward with a deal to acquire part of Delphi Corp. despite the
likelihood of a key partner dropping out, in a test of private equity's
interest in Detroit's auto industry.
The
likely departure of Cerberus Capital Management from a group of investors
looking to spend up to $3.4 billion on restructuring the auto supplier
puts pressure on the United Auto Workers union to strike a deal that will
draw investment to Delphi and save jobs.
It also puts pressure on General Motors Corp., Delphi's former parent and biggest customer, to keep
the company on a path to recovery.
Delphi, which yesterday said
Cerberus was likely to pull out of the plan it had backed, will seek to
replace the up to $1.7 billion Cerberus had committed to the proposal.
Appaloosa founder David Tepper said in an interview he intends to remain
part of a deal to own Delphi. "We've been
in here for a while and we will continue to be there," said Mr. Tepper,
whose group is the largest shareholder in Delphi with 9.3% of the company's shares.
Cerberus spokeswoman J.J. Rissi said "as a matter of policy, we
can't comment on the anticipated changes announced [yesterday] by
Delphi." The firm may still remain a
Delphi lender.
Cerberus began
backing away from the proposal after encountering difficulties reaching an
agreement with the UAW to cut wage and benefit costs. That underscores the
difficulties private equity may face as it looks to invest in and turn
around Detroit's auto industry. Cerberus is
among the private-equity firms looking to acquire DaimlerChrysler AG's
Chrysler Group, and the UAW has expressed skepticism over such a deal.
Delphi bonds have taken a hit this week as talks stalled, with the
spread on its 7.125% coupon bonds due May 1, 2029, rising to 1.7
percentage point over Treasurys yesterday from 1.16 Monday, indicating
increased borrowing costs and greater skepticism.
People familiar
with the matter said Cerberus had assumed Delphi would have less market
value after bankruptcy than partners Appaloosa and Harbinger Capital
Partners, the third-largest Delphi
shareholder, had assumed, these people said. That in part led Cerberus to
demand deeper cuts in wages and benefits for new hires than the UAW is
willing to accept, these people said.
Talks had recently been at a
standstill over wages and benefits.The union believes it has made enough
concessions already by agreeing to buyouts for two-thirds of its members
at Delphi and a wage-and-benefit package
giving employees $42 an hour, including benefits, by 2011. That compares
with $70 an hour for previous Delphi
hires, but some on the other side of the table say the figure is still to
high, said people familiar with the matter.
Cerberus also worried
it could become too auto-focused, said the people familiar with the
matter. In addition to the Chrysler bid, Cerberus bought a majority stake
in GM's financial services arm and moved to purchase supplier Tower Automotive Corp.
Cerberus's likely exit comes amid increasing tension in the
Delphi talks. GM has been lining up
alternative suppliers for many of the parts it now gets from Delphi in
case the UAW strikes and shuts down Delphi plants. The UAW, Delphi and the equity funds are all leaning on GM to
subsidize UAW wages. Delphi is GM's largest supplier, providing about $15
billion a year in parts such as steering systems and satellite radios.GM
spokeswoman Renee Rashid-Merem said GM "remains committed to working with
Delphi on an agreement that makes sense
for all involved parties."
UAW President Ron Gettelfinger also is
under great pressure and faces contract negotiations with GM this year.
"He might squeeze a few hundred millions dollars more out of GM" for
Delphi, but then "GM will just come back in two months during national
talks and want blood for that," said a UAW official familiar with Delphi
talks.
Mr. Gettelfinger and other union officials are worried that
private-equity funds will be long gone in a few years and also are
resisting equity-fund demands for shorter labor contracts, such as for
just two years, said this a UAW official.
GM and the UAW both have
indicated they want Delphi talks to wrap
up before UAW talks with GM, Ford Motor Co. and DaimlerChrysler AG's
Chrysler Group begin in June.
Delphi said yesterday it will try to amend the
investment agreement and is meeting with its creditor and equity
committees to discuss Cerberus's likely exit. It expects the creditors
committee will consider taking more equity in placeto help fill in the
$1.7 billion gap left by Cerberus' expected departure.Delphi said it is
"hopeful" GM will support the amended framework agreement. Under
Delphi's current plan framework
agreement, GM would receive seven million shares of common stock and $2.63
billion in cash and the "unconditional release of any alleged estate
claims against GM."
One option would be for GM to close any gap by
taking more Delphi shares and less cash,
said a person familiar with the talks.
Although Cerberus hasn't
given Delphi official notice of
termination, the company nevertheless announced the possible changes
yesteday. Delphi said the changes don't
preclude its intention to file a reorganization plan by July 31, when its
exclusive right to file a plan expires.
Delphi said it plans to emerge from Chapter 11 later
this year. Previously, the company said it planned to emerge in midyear.
Contact Cerberus Capital Management at 212-891-2100.
http://www.delphi.com
http://www.cerberuscapital.com
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Texas
Politics Improve For TXU Deal, Final Hurdle Remains
4/20/2007
– The tense Texas political
environment that greeted a private equity-led plan to buy TXU Corp.
appears to have eased. The state legislature has backed off one proposal
to increase regulatory oversight of utility mergers.
One potential
obstacle to the $32 billion purchase by Kohlberg Kravis Roberts & Co.,
Texas Pacific Group and other investors was removed Friday when the state
House of Representatives passed a bill mandating stricter state oversight
for utility mergers - but excluded the TXU buyout. Although the bill must
still be reconciled with a version passed by the state Senate, the change
was a coup for KKR, Texas Pacific and other investors such as Lehman
Brothers, Citigroup, Morgan Stanley and Goldman Sachs unit GS Capital
Partners.
However, TXU and its potential owners aren't out of the
woods yet. One potential obstacle for the TXU merger remains: a bill that
would require the Dallas-based utility to sell some of its power plants,
which have been a significant driver of earnings growth for the company.
After the investor consortium announced its plans to acquire TXU
in late February, Texas lawmakers introduced legislation that could have
slowed or derailed the TXU sale by making the utility smaller and forcing
it to seek approval for the sale from state regulators. Last month, KKR
co-founder Kenry Kravis and TPG co-founder David Bonderman appealed
directly to legislators, asking them not to "change the rules" and
suggesting they might not have made an offer for TXU had they known new
regulations were imminent.
Lawmakers responded by killing a
proposal requiring state approval of the TXU merger. The result is a
marked improvement in the outlook for the buyout.
"It probably
speeds the process given that (the buyers) won't have to go through all
the regulatory speed bumps," said John Kearney, an analyst for Morningstar
in Chicago.
The Texas legislature
is still locked in debate on a measure that would require TXU to sell some
of its power plants. The bill addresses concerns about TXU's dominance of
the wholesale electricity market in parts of Texas, particularly
in the north.
Similar requirements in other states have scuttled
large utility mergers. In 2006, Chicago-based Exelon Corp. walked away
from a $17 billion deal with Newark, N.J.-based Public Service Enterprise
Group after New
Jersey regulators demanded that the companies sell
power plants and cut electric rates.
TXU and its investors "aren't
too happy" about the Texas bill "for obvious reasons," said Daniel Womack,
a spokesman for the bill's sponsor, Texas Sen. Troy Fraser, R-Horseshoe
Bay.
A spokeswoman for KKR did not return a telephone call seeking
comment, and a spokesman for Texas Pacific referred calls to Eller.
The Texas House is expected to vote early next week on a version
of the bill that would prohibit a single company from owning more than 15%
of the power generation in the state. The Senate version of the bill is
less restrictive, allowing a company to own up to 20% of the power
generation in a particular electricity market. TXU's highest concentration
of generating capacity is in North Texas.
Reach KKR at 212-750-8300, Texas Pacific Group at 817-871-4000;
Goldman Sachs at 212-357-7780; TXU at 214-812-4600.
http://www.texaspacificgroup.com
http://www.txu.com
http://www.kkr.com
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Meriwether's Bullseye Sold To Summit's
Safeguard
4/20/2007
– Summit Partners' safety
products platform Aramsco Inc. bought Bullseye Environmental Inc., another
company that supplies protective clothing, respiratory systems, and
decontamination equipment.
Terms of the deal, which closed March
12, weren't disclosed. The seller was Meriwether Capital LLC, a New York firm that
invests in middle-market companies.
Bullseye Environmental, of
Tullytown, Pa., sells a range of safety gear for
use in removing lead, restoring water-damaged property and removing mold.
Aramsco's products are used in the environmental and homeland
security industries. Summit Partners partnered with WSG Partners in 2005
to buy the Thorofare, N.J.-based company from its management team, telling
LBO Wire at the time that they planned to build it up through
acquisitions.
This appears to be its first publicly announced
add-on acquisition. Summit and Meriwether executives didn't
return calls for comment.
Bullseye Environmental was advised by
Cobblestone Advisors, Harris Williams & Co.'s lower-middle-market
group.
Reach Summit Partners at 617-824-1000 and
Meriwether at 212-649-5890.
http://www.summitpartners.com
http://www.meriwethercapital.net
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H&R Block To Sell Option One Mortgage To
Cerberus
By
Staff Reporters
4/20/2007
– H&R Block Inc. said it has
agreed to sell Option One Mortgage Corp., the home-lending unit the
company has been trying to find a buyer for since November, to OOMC
Acquisition Corp., a newly formed company affiliated with Cerberus Capital
Management LP.
The transaction excludes Option One subsidiary
H&R Block Mortgage Corp., a loan originator dealing directly with
retail borrowers.
The cash purchase price will be the value of the
tangible net assets of the business at the date of closing, less $300
million. At Jan. 31, Option One had tangible net assets of $1.27 billion.
H&R Block, Kansas
City, said it has the right to sell certain Option
One assets before closing. The company said that given that provision and
changing market conditions, the tangible net asset value at closing will
be different than it was at Jan. 31.
Chief Executive Mark Ernst
previously said the company expects the sale price of the mortgage arm to
exceed its book value of $1.3 billion. Skeptics said H&R Block was
trying to sell the business at the worst possible time, amid the
deterioration in the subprime-lending market.
A growing list of
lenders are struggling to find buyers for their subprime businesses as
late payments and defaults on loans to people with the weakest credits
soared to a four-year high last year. Subprime lenders provide loans for
borrowers who have weak credit or don't have the documentation required by
conventional mortgage lenders.
H&R Block acknowledged late
last month that it failed to meet its self-imposed target for selling
Option One, blaming "recent events in the subprime-mortgage industry." The
company said in November that it would explore alternatives for its
mortgage business and expected to conclude that process in March.
H&R Block said in its release Friday that it may receive an
additional cash payment in the form of an earnout. The company expects to
incur a noncash pretax charge for impairment of its investment in Option
One of about $290 million to $320 million, to be recorded in its fiscal
fourth quarter ending April 30. On Thursday, H&R Block said it
expected to report a net loss for its fiscal year as a surge in defaults
on subprime mortgages had slashed the value of Option One.
H&R
Block has decided to cease operations of H&R Block Mortgage before the
transaction closes, which will result in pretax charges for severance,
facilities closure and other costs of about $25 million. In addition, the
company expects to record in its fiscal 2007 fourth quarter a noncash
pretax charge of about $16 million in connection with the impairment of
H&R Block Mortgage goodwill.
http://www.hrblock.com
http://www.cerberuscapital.com
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No
Counter Bidders Emerge For Vertrue
By
Staff Reporters
4/20/2007
– Internet marketing services
company Vertrue Inc., which is in the process of being taken private by
One Equity Partners LLC and co-investors, reached the end of its "go-shop"
period earlier this week, with no counter bidders emerging.
One
Equity Partners, Oak Investment Partners and Rho Ventures V are paying
$48.50 per share or about $616 million. Including debt, the deal is worth
about $800 million.
Vertrue membership programs that offer
discounts on health care, financial services and other services on behalf
of credit card companies, retailers and banks. The Norwalk, Conn.-based
company also owns online matchmaking site Lavalife.
Reach One
Equity Partners at 212-277-1500, Rho Ventures at 650-463-0300 and Oak
Investment at 203-226-8346.
http://www.oakinv.com
http://www.oneequity.com
http://www.rhoventures.com
http://www.vertrue.com
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Investcorp Closes Sale Of Harborside Healthcare For
$350M
By
Staff Reporters
4/20/2007
– Investcorp has closed the sale
of long-term care company Harborside Healthcare Corp. to publicly traded
Sun Healthcare Group Inc. for $350 million in cash.
Under
Investcorp's watch, the company nearly doubled in size in terms of revenue
and number of facilities, LBO Wire previously reported.
Harborside
Healthcare has about 9,265 employees serving more than 8,300 residents and
patients on a daily basis.
Reach Investcorp at 212-599-4700.
http://www.harborsidehealthcare.com
http://www.investcorp.com
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Backers Of AMC To Sell Shares In IPO, Set At
$18-$20 A Share
4/20/2007
– Underwriters for private
equity-backed AMC Entertainment Inc. on Thursday set the size of the
company's pending initial public offering at 39.5 million shares at an
estimated price range of $18 to $20 a share.
AMC merged with Loews
Cineplex Entertainment Corp. in a $4 billion deal last year. The equity
portion of the deal wasn't clear. As of December 28, 2006, the company
owned or operated about 382 theatres with a total of 5,340 screens, about
87% of which are located in the U.S. and Canada.
Before the
merger, both companies were backed by private equity firms, resulting in
the merged company having a plethora of buyout backers: J.P. Morgan
Partners, Apollo Investment, Bain Capital, Carlyle Group and Spectrum
Equity Investors.
J.P. Morgan and Apollo own a 20% stake each and
Bain and Carlyle own 15% stakes, followed by Spectrum Equity, which owns a
10% stake, according to an amended Form S-1 filed with the Securities and
Exchange Commission.
All buyout firms are selling some shares in
the IPO. AMC won't receive any of the proceeds from the sale of the
shares. JP Morgan Partners and Apollo are selling about 8.3 million shares
and stand to get back around $157 million if the IPO is priced at the mid
point of the price range set by the underwriters. Bain and Carlyle will
reap about $114 million from selling about 6 million shares. Spectrum
Equity is selling about 3.8 million shares and will get back about $72
million.
Kansas City, Mo.-based AMC filed the IPO in December to
sell up to $750 million in common stock but didn't detail the terms of the
offering.
Goldman, Sachs & Co., Citi, Deutsche Bank Securities
and JPMorgan were listed as the top-tier underwriters for the offering.
Banc of America Securities LLC, Bear, Stearns & Co. Inc., Credit
Suisse, Merrill Lynch & Co., BMO Capital Markets, Morgan Stanley, UBS
Investment Bank and Wachovia Securities were also listed as underwriters.
The underwriters have an option to purchase up to an additional
5.9 million shares from the selling holders to cover overallotments, the
filing said.
AMC Entertainment filed its IPO prospectus under the
name of its parent company, Marquee Holdings Inc.
In January 2006,
Marquee Holdings merged with LCE Holdings Inc., the parent of Loews
Cineplex Entertainment Corp. Upon completion of this IPO, Marquee Holdings
will change its name to AMC Entertainment Inc., the SEC filing said.
AMC plans to list its common stock on the New York Stock Exchange
under the symbol AC.
Reach AMC at 816-221-4000 and Loews at
646-521-6200.
-With reporting by Brian Coyle.
http://www.baincapital.com
http://www.jpmorgan.com
http://www.carlyle.com
http://www.amctheatres.com
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Blackstone Hires Susan Balloch As Executive
Director
By
Staff Reporters
4/20/2007
– Blackstone Group has hired
Susan Balloch as an executive director to the firm's private equity group.
Balloch's role encompasses overall management and administrative
aspects of the group's activities.
Balloch was formerly with Welsh
Carson Anderson & Stowe in its investor relations group. Before that
she was managing director and chief administrative officer for global
investment banking and private equity at Credit Suisse. Prior to the
acquisition by Credit Suisse, Balloch was a managing director at
Donaldson, Lufkin & Jenrette. She was also an adjunct arofessor and
executive-in-residence at Columbia Business School.
She received her
bachelor's of science degree at Georgetown University and a master's in business
administration at The Wharton School of the University of
Pennsylvania.
Reach Blackstone at 212-583-5000.
http://www.blackstone.com
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EMAlternatives Names Alexandra Gardiner
CFO
4/20/2007
– Newly formed private equity
advisory firm EMAlternatives LLC has named Alexandra Gardiner chief
financial officer.
Gardiner comes to EMAlternatives from her
position as vice president of finance for The Rock Creek Group, a
Washington-based firm currently managing $3.5 billion in hedge funds of
funds portfolios. She is also a veteran of Credit Suisse First Boston and
Price Waterhouse (now PricewaterhouseCoopers) and Investment Management
Services Group.
Gardiner will join the firm in its Washington office.
EMAlternatives, formed in March 2007, offers discretionary and
non-discretionary investment services focusing on emerging private equity
markets. From offices in Washington and
Amsterdam,
EMAlternatives tailors primary, secondary and co-investment strategies for
instituional investors.
Reach EMAlternatives at 202-659-5959.
http://www.emalternatives.com
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NM
Investment Council Mulls National Co-Investment
Program
4/20/2007
– The New Mexico State Investment
Council is discussing whether to hire at least one external manager to
handle the limited partner's co-investments in the U.S.
Greg Kulka, director of alternative investments, said he wasn't
sure when a decision will be made, but should the LP move forward, it
would co-invest across the PE universe, in buyout, venture and distressed
debt deals. To ensure diversification, Kulka said co-investments wouldn't
be limited to the underlying managers in its PE portfolio.
New
Mexico SIC isn't new to the co-investment scene. In November 2006, it
hired Sun Mountain Capital to manage its New Mexico co-investment fund, as well
as advising on its venture capital investments. It also committed to
Clayton Dubilier & Rice's $1 billion co-investment fund, after signing
up for Clayton Dubilier & Rice Fund VII LP.
Kulka said that
SIC tried in 2003 to do co-investing in-house for companies located in its
state. It did three deals, but found that the time and expertise needed
was overwhelming.
"What we do here is assess managers, and we're
pretty good at doing that," he said. "If you've never run a company
before, it's hard to say much."
Reach New Mexico SIC at
505-424-2500.
http://www.sic.state.nm.us
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Nippon Life Plans To
Boost Alternative Investments This FY
By
Staff Reporters
4/20/2007
– Nippon Life Insurance Co. wants
to increase investments in alternatives and the emerging markets this
fiscal year, and aims to eventually increase its holdings of such assets
to around Y1 trillion, a fund manger said.
Japan's
largest life insurer had assets in its general account totaling Y48.62
trillion as of March, and the huge size of its funds means that market
participants closely watch its investment decisions.
"I don't
think all the alternative markets are attractive," Tomiji Akabayashi,
general manager at finance and investment planning, told reporters at a
briefing. "However, we would like to steadily increase holdings, carefully
examining individual products."
He said increased investment in
products such as private equity and hedge funds would be aimed at boosting
the insurer's revenue in the medium- to long-term.
Nippon Life
also plans to increase its holdings of domestic bonds by Y500 billion
during the fiscal year started April, allocating 50% of the money to
Japanese government bonds, Akabayashi said.
Nippon Life is looking
for investment opportunities in emerging markets, though it hasn't decided
which countries to invest in yet, he said.
The insurer so far
holds Y300 billion of assets in alternatives and emerging markets. Its
holdings of assets in emerging markets alone stand at between Y50 billion
and Y100 billion.
The insurer formed a credit and alternative
investment department on March 25 to strengthen such investment
strategies.
-By Megumi Fujikawa
http://www.nissay.co.jp/english/
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VSS Buys Stake In Spanish Mobile Content Co
LaNetro Zed
By
Staff Reporters
4/20/2007
– Veronis Suhler Stevenson
acquired a stake in LaNetro Zed, a Madrid-based provider of ringtones,
games and other mobile content.
Veronis will be represented on
Zed's board, according to a joint statement posted on Zed's Web
site.
The amount of the investment wasn't disclosed.
Zed's
founders, the Pérez family, are the company's largest
shareholders.
Zed said Veronis will help the company expand its
U.S. business.
The
company, which canceled a planned initial public offering in Madrid last year,
recently bought a majority stake of MonsterMob Group.
Reach Veronis
Suhler Stevenson at 212-935-4990.
http://www.vss.com
http://www.lanetrozed.com
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Telefonica To Sell Airwave O2 To Macquarie For GBP1.9
Billion
By
4/20/2007
– Telefonica SA agreed to sell
its Airwave 02 Ltd. business, which provides emergency radio services in
the U.K., to two funds managed by
the Macquarie Group.
The parties have agreed to complete the
transaction on April 20.
The total valuation of Airwave O2 is
EUR2.98 billion (GBP 2.015 billion), generating total net proceeds of
EUR2.86 billion (GBP1.93 billion) after deducting Airwave O2's net debt
and other liabilities.
Reach Macquarie at 011-61-2-8232-3333.
http://www.telefonica.com
http://www.macquarie.com
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Up
To Ten Bidders Give New Look A Look
4/20/2007
– U.K.
retailer New Look has attracted up to 10 bidders ahead of the formal
auction process, a person familiar with the situation told Dow Jones
Newswires.
The company is expected to fetch up to GBP2 billion or
$4 billion.
The potential bidders are mainly private equity firms
and include London-based CVC Capital Partners Ltd. as well as
U.S. players TPG Inc., Warburg
Pincus LLC and Blackstone Group, other people said.
Strategic
players may include Landmark Group, a retail group in the Middle East and
India, which already has a 3%
holding in New Look. Landmark Group was recently looking to add to its
holding and may decide to launch a bid for the whole company as part of a
consortium, Dow Jones Newswires has been told. The Dubai-based retailer
also has a franchise deal with New Look which involves opening 40 new
stores across the region over the next five years.
New Look's
private equity owners hired Merrill Lynch & Co. Inc. to review its
strategic options last month. The investment bank is expected to send out
information memoranda at the end of April.
Permira and Apax
Partners each hold about 30% of New Look after taking it private in a $1.4
billion buyout in February 2004. The company's founder, Tom Singh, holds a
22% stake, management have a 15% shareholding, while Quilliam Investments
has a holding of less than 3%.
New Look has around 570 stores in
the U.K. and Ireland, as well as 232 stores in France trading under the
name Mim and eight New Look branded stores in France and Belgium.
New Look joins a raft of European retailers being targeted by
private equity as well as strategic buyers.
Dutch department store
chain HEMA, valued at around EUR1 billion ($1.36 billion), has attracted
the interest of around 20 private equity firms alongside some seven or so
trade parties while London-based Apax is interested in buying a
significant stake in German sportswear chain Adidas AG, persons familiar
with the deals have told Dow Jones Newswires.
Reach Permira
Advisers at 212-386-7480 and Apax Partners at 212-753-6300.
http://www.newlook.co.uk
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Bank Of NY To Service New Fund From Global
Investment House
By
Staff Reporters
4/20/2007
– Bank of New York Co. said
Thursday it will service Global Capital Partners' Global Buyout Fund,
which will target buyout opportunities in the Middle East and North Africa, Turkey, China, India and Pakistan.
Global Capital Partners is a unit of Global Investment House,
which launched the global fund earlier this year without detailing its
size or investment range.
The fund expects to target growing
profitable companies with enterprise values of more than $100 million. It
will target an annualized internal rate of return of not less than 20%,
net of all fees and the general partner's carried interest, according to
the Web site of Global Investment House.
Bank of New York is
offering private equity fund sponsors, fund accounting, investor services,
financial reporting, corporate governance and tax support services in
multiple domiciles.
Global Investment House, founded in 1998 is
regulated by the Central Bank of Kuwait. It manages more than
$7.2 billion and has branches in Bahrain, Dubai, Jordan, Qatar, Sudan and Abu Dhabi in the United Arab
Emerites.
Reach the Bank of New York at 44-20-7964-6119 and Global
Capital at 965-240-0551.
-With reporting from Veronica Dagher.
http://www.bankofny.com
http://www.globalinv.net
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Terra Firma Tops KKR Alliance Boots Bid
4/20/2007
– U.K.
financier Guy Hands' private equity firm Terra Firma Friday triggered a
fierce bidding war for pharmacy and healthcare retailer Alliance Boots
PLC, topping an earlier private equity-led bid with an offer of 1,126
pence a share.
Earlier Friday, private equity firm Kohlberg Kravis
Roberts & Co. unveiled a revised 1,090 pence a share cash takeover
offer for Alliance Boots, together with Italian billionaire Stefano
Pessina, valuing the U.K. pharmacy chain at GBP10.6
billion.
Last week, Terra Firma Capital Partners and Wellcome
Trust, one of the world's largest medical-research charities, said they
are at the "early stages of assessing Alliance Boots" but haven't reached
a decision whether to make an offer.
Shortly after the revised
offer was unveiled to the London market Friday morning, Terra Firma
said HBOS PLC had joined its consortium.
KKR and Pessina's 1,090
pence a share in cash offer is 90 pence, or 9%, above their initial 1,000
pence offer last month. The price is inclusive of any final dividend to be
declared in respect of the financial year ended March 31, 2007.
Alliance Boots Chairman Nigel Rudd said last year's merger created
a "hugely valuable business" and the 1,090 pence a share offer is a "good
price for shareholders."
Alliance Boots shares jumped at Friday's
London
opening on the revised 1,090 pence a share bid and investor hopes of a
possible bidding war.
They opened 5.5% higher, and by 0935 GMT,
they were up 8.5% or 89 pence at 1139 pence in a broadly higher London market.
-Martina Cruz Riquet contributed to this story.
http://www.allianceboots.com
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Merrill Lynch To Up Focus On PE, Property In
China
4/20/2007
– As China pushes domestic rather than
Hong Kong initial public offerings,
Merrill Lynch & Co. is looking to increase its focus on property
investments in the mainland and private equity investments in the region,
said a senior executive at the investment bank.
The U.S.-based
firm has had a strong run with underwriting the IPOs of Chinese companies
in recent years, sponsoring the Hong Kong IPOs of some of the mainland's
largest state-owned enterprises.
This included the Industrial
& Commercial Bank of China's $21.2 billion IPO last
year, the world's largest by amount raised.
With Chinese companies
now being encouraged by regulators to list shares in the domestic market,
Merrill Lynch stands to lose as it doesn't have a license to underwrite
mainland IPOs unlike some of its biggest competitors, said the chairman of
its international operations.
"In the short-term, this is a
setback for us, though it's not a threat to the company in the medium to
long term," Kevan Watts told Dow Jones.
Chinese regulators "are
now very focused on improving the quality of the companies listed
domestically, so the extreme focus on (domestic) listings of big benchmark
Chinese companies is evident," said Watt.
Aside from wholly
Chinese owned investment banks, only UBS AG's UBS Securities, Goldman
Sachs Inc.'s Goldman Sachs Gao Hua Securities Co., and China International
Capital Corp., 34% held in a passive investment by Morgan Stanley, can
underwrite A-share offerings.
Many foreign investment banks
including Merrill Lynch were caught out late last year, when
China's securities regulator
closed the door on new foreign ventures in a bid to help domestic
brokerage houses recover after multi-year lows on local bourses.
A
proposed joint venture between Merrill Lynch and Huaan Securities was
never finalized after discussions began three years ago.
"We would
obviously have preferred to have a license before the moratorium," said
Watts.
In the past, the best
Chinese companies tended to list in Hong
Kong due to that market's reputation for strong corporate
governance and its less volatile performance compared with mainland
markets. But that is changing.
Any positive developments for
foreign investment banks will depend on "the way in which authorities in
Beijing
choose to sequence the expansion of the role of foreign securities firms
in the domestic capital markets," he said.
For now, Merrill Lynch
will focus its attention on other businesses in China as
it seeks to grow further in the rapidly expanding market.
"Our
business is all about developing a broad range of services for our
customers, and there is no shortage of things for us to do in
China," said Watt.
Apart from continuing with its advisory business, Watt said the
bank is increasing focus on private equity in the Asia-Pacific region,
specifically in China.
"Our managing
director in charge of the China region is spending much
more of his time on private equity in order to develop our business
there."
The investment bank also plans to boost spending in the
real estate investment business. Currently, the company owns properties in
Beijing and Nanjing.
Outside of
China, private equity
will also help drive Merrill Lynch's growth in another booming Asian
economy - India.
The company is
diversifying its operations there after increasing its stake in its Indian
joint venture to 90% from 40% late in 2005.
"For most of the last
15 to 20 years, our business has been very largely focused on equity
markets and investment banking," said Watts.
"But as the regulatory environment
changes in India, we
can now do a lot more in the fixed-income markets, and private equity,
which is an activity that's very much focused in India."
Watts expects future growth in India to
come more from private equity and fixed-income businesses than its core
investment banking operations.
http://www.merrilllynch.com
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Director Chides Topps Bd For Not Seeking Comments
On Proxy
By
Staff Reporters
4/20/2007
– An investor group including
Topps Co. director Arnaud Ajdler and Crescendo Investments II LLC on
Thursday sent a letter to Topps' board, criticizing it for not soliciting
comments from three dissenting directors with regard to a merger proxy
prior to its filing on Tuesday.
In Thursday's letter, disclosed in
a Securities and Exchange Commission filing, Ajdler also criticized the
company for not making drafts of the merger proxy available to the
dissenting directors, and for not providing all of the relevant facts in
the proxy regarding "certain events and circumstances" surrounding the
proposed merger.
As reported, Topps board previously blocked two
directors from officially monitoring acquisition offers that might compete
with a recently announced - and controversial - bid to buy the
trading-card company for about $385 million.
In early-March, Topps
agreed to be purchased for $385 million, or $9.75 a share, by Tornante
Co., the private investment company of former Walt Disney Co. chief
executive Michael Eisner, and buyout firm Madison Dearborn Partners LLC.
In Thursday's letter, Ajdler said the fact that Topps' board
didn't solicit comments from Timothy Brog, John Jones or himself, or make
available drafts of the merger proxy before the filing, is "unjustifiable"
and "another example of the board's disregard for its stockholders'
representatives and basic corporate governance."
Ajdler also said
in the letter that he believes the proxy statement is "incomplete,"
because it gives the "incorrect impression" that Topps was shopped or that
alternative proposals were solicited before entering into the merger
agreement. He further reiterated his position that the existing proposed
merger is not in the best interest of Topps' stockholders because the per
share price is "wholly inadequate" and doesn't provide full and fair value
for stockholders.
Earlier this week, Topps said it received a
competing purchase offer during the "go-shop" period, but decided that the
new bid wasn't better. The bid from a competitor of Topps' entertainment
business was $10.75 a share in cash, $1 higher than the Tornante-Madison
Dearborn offer price.
Shares of Topps, which mainly produces
collectible trading cards, confections and sticker-and-album collections,
were recently trading at $10.03 each, up 2 cents from Wednesday's close.
The Crescendo group currently holds a 6.6% stake in Topps.
Reach Topps at 212-376-0300; Madison Dearborn at 312-895-1000.
http://mdcp.com
http://www.topps.com
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Wachovia Reorganizes Investment Banking
4/20/2007
– Wachovia Corp. promoted
Jonathan Weiss, who oversaw its banking relations with private equity
firms, to head its reorganized investment bank.
Weiss will head a
group that combines his financial sponsors group with the company's
traditional corporate finance business, Wachovia said in a news release
Thursday. The move reflects the increasing importance of private equity
firms, which have fueled 20% to 30% of mergers and acquisitions activity
worldwide in the last two years.
Jeff Armstrong, who ran corporate
finance, takes the position of deputy head of investment banking and
reports to Weiss. Weiss will continue to report to Ben Williams, who runs
Wachovia's global markets and investment banking businesses, the biggest
part of its corporate banking division.
Wachovia reported earlier
this week that its investment bank's profits tumbled to $379 million from
$491 million a year ago and $513 million in the fourth quarter - at a time
when Wall Street rivals such as Goldman Sachs Group and Morgan Stanley had
record results. Investment banking, which provided about 16% of Wachovia's
total profits, was weighed down by lower principal investing revenue and
weakness in global rate products and equities trading.
Weiss
joined Wachovia in 2005 to run the financial sponsors group that
coordinates financing, deal ideas and other services for private equity
firms. Weiss has 25 years of experience, and previously worked at J.P.
Morgan Chase.
Wachovia said it is seeking a replacement for Weiss
to run financial sponsors.
The reorganization does not affect the
mergers and acquisitions business, which continues to be run by Rob Engel,
who reports to Williams, a spokeswoman said.
Before assuming
leadership of corporate finance, Armstrong had run mergers and
acquisitions, and preceded Weiss in running financial sponsors and
leveraged capital. He worked at Citigroup's Smith Barney unit before
joining Charlotte, N.C.-based Wachovia.
-David Enrich contributed
to this story.
http://www.wachovia.com
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Ace USA Forms Mergers &
Acquisitions Practice
4/20/2007
– Ace USA, the
U.S.-based retail operating division of the Ace Ltd., said it is creating
the Ace USA mergers & acquisitions industry practice, which will
concentrate on both private equity groups and strategic mergers and
acquisitions.
Seth Gillston has been named to lead the new
practice.
It will provide risk management solutions and insurance
coverage to buyers and sellers. Ace Ltd. is based in Bermuda.
Reach Ace USA at
215-640-1000.
http://www.ace-ina.com
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Recent
LBO Funds Launched And Raised
|
Buyout,
Corporate Finance and Special Situation Funds Launched and
Raised |
|
4/13/07
to 4/19/07 |
|
Firm |
Fund |
Target |
Status |
|
Quaker
BioVentures |
Quaker
BioVentures II LP |
$350M-$400M |
Raising;
has closed on $175M |
|
Imperial
Capital |
Imperial
Capital Acquisition Fund IV LP |
C$500M |
Expects
to begin raising this year |
|
Inter-Atlantic
Group |
Inter-Atlantic
Fund II LP |
$150M |
Raising;
has closed on $23M |
|
KPS
Capital Partners |
Turnaround
fund |
$1B |
Expects
to begin raising in next few
weeks |
|
GE
Media, NBC Universal |
Media
and technology fund |
$250M |
N/A |
|
VMG
Equity Partners |
Consumer-focused
fund |
$300M |
Raising;
has closed on $119M |
|
Hellman
& Friedman |
Hellman
& Friedman Capital Partners VI
LP |
$8B-$8.5B |
Closed
with $8.4B |
|
Pangaea
Ventures Ltd. |
Pangaea
Ventures Fund II LP |
$100M |
Raising;
has closed on $20M |
|
Expansion
Capital Partners |
Clean
Technology Fund II LP |
N/A |
Raising;
has closed on $80M |
|
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|
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