The Brief Mergermarket’S Weekly Private Equity Round-Up
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The Brief mergermarket’s Weekly Private Equity Round-Up 18 December 2009 | Issue 43 Editorial 1 The Noticeboard 2 Private Equity Opportunities 3 Deals of the Week 9 Pipeline 17 Statistics 20 League & Activity Tables 23 Top Deals 32 Investor Profile: Welsh, Carson, Anderson & Stowe 35 Notes & Contacts 37 The Week That Was..... The last seven days: private equity in review After a brief hiatus, the large cap private equity transaction company. In a transaction valued at a total cash returned with a bang this week with 21 deals worth consideration of US$785m, the financial investors exited US$6.36bn coming to the market. The largest deal of to medical devices company Ethicon. the past seven days saw EQT Partners and GIC Special Investments acquire Springer Science + Business Despite the distressed nature of the abovementioned Media Deutschland, the Germany-based scientific books Springer deal, it is undeniable that private equity has publisher. The deal also witnessed involvement on the finally returned to the top of the wider M&A market in sell-side with Cinven and beleaguered fund Candover recent months. Indeed, it is hugely significant that six Investments selling out of the company for a total of the top 10 private equity-related transactions of 2009 consideration of US$3.28bn. have been brokered in the fourth quarter of the year. Moreover, four of these deals have been seen in Europe At first glance, the valuation alone suggests that the with the most significant such transaction being Apollo transaction is something of a throwback to the buyout Management and BC Partners US$5.22bn disposal of boom. However, at closer inspection it can be seen that German cable network operator Unitymedia in the middle it is most certainly a product of the economic downturn of November. After a tough 2009, the outlook for private with the implied equity value of the deal standing at just equity over the next 12 months has certainly improved US$446m. Tellingly, the rest of the cash will be used to with such deals giving reason for cautious optimism. refinance and reduce Springer’s net debt, something which Cinven and particularly Candover would have By Tom Coughlan, Remark struggled to do. Nevertheless, the fact that the company’s lenders agreed to finance a new debt package indicates that the markets are beginning to return to a degree of normality. Elsewhere, the second largest deal of the week was announced in North America where a consortium of investors including New Enterprise Associates, Delphi Ventures, Versant Ventures, Meritech Capital Partners and Johnson & Johnson Development Corporation sold out of Acclarent, the US-based medical technology The Noticeboard People moves Date Title Story snapshot Source 17-Dec-09 HarbourVest HarbourVest Partners, the global private equity firm, has promoted Peter Lipson, Julie www.harvourvest.com announces eight Ocko, and Mary Traer to the position of Managing Director. Traer has also been named appointments Chief Administrative Officer. Additional appointments include Karin Lagerlund as Chief Financial Officer; Sebastiaan C. van den Berg as Principal; and Bruce G. Pixler, Catherine Shih, and Abraham Soquar were promoted to Vice Presidents. 17-Dec-09 Actis to replace Global private equity firm Actis, which manages US$4.8bn, has appointed Gary Addison www.privateequityonline.com Southeast Asia as Head of its Southeast Asia Operations. Addison, who heads Actis’ Business Services head Investments, previously spent 13 years at UK-based private equity firm 3i. He will replace Alun Branigan, who joined the firm in 2002 and will leave at the end of this year. 16-Dec-09 Doughty Hanson London-based private equity firm Doughty Hanson has named Mark Corbidge and John www.doughtyhanson.com names new private Leahy Co-Heads of Private Equity, reporting to executive Co-Chairman Richard Hanson. equity co-heads Leahy joined the firm in 2002 and Corbidge joined the firm in 2004. Doughty Hanson, established in 1985, focuses on private equity, real estate and technology ventures. New funds Date Title Story snapshot Source 17-Dec-09 Demeter Partners French cleantech-focused private equity firm Demeter Partners has held the final close www.demeter-partners.com holds final close on of its Demeter 2 fund on €203m, exceeding its target of €200m. The vehicle, which second fund was launched in November 2008 and held a first close at€ 125m, will target cleantech investments in France and Europe, with an emphasis on expansion capital. Investors in the fund include two sponsors: CDC Entreprises and IFP Investissements. New investors include the European Investment Fund, Spanish fund of funds Neotec, Pictor, Total, Dalhia, GDF Suez, Actys 2, Crédit Coopératif and AXA. 16-Dec-09 Better Capital Better Capital has raised £142.4m for its first fund to be listed on AIM, the London www.altassets.com raises £142.4m Stock Exchange platform for small to medium-sized companies. The listed company is ahead of public reportedly a feeder vehicle for a traditional private equity fund, which will be advised by listing Better Capital. Better Capital was founded by Jon Moulton, who co-founded London- based private equity firm Alchemy in 1997. Moulton left Alchemy earlier this year. 16-Dec-09 Onex raises Toronto and New York-based private equity firm Onex has closed Onex Partners III with www.onex.com US$3.5bn for third US$3.5bn in third-party capital. Onex has committed an additional US$500m to the fund, fund making the total fund size US$4bn. Onex, which manages roughly US$11bn, focuses on acquiring high-quality businesses and also manages real estate and credit securities platforms. 16-Dec-09 Kelso raises £100m Kelso Place Asset Management, the UK-based turnaround firm, has raised £100m for www.privateequityonline.com for mid-market its fourth fund, exceeding its original £75m target. The fund will target turnarounds and turnarounds special situations opportunities, focusing on controlling stake investments in lower mid- market companies in the UK with annual revenues in the £10m to £100m range. 15-Dec-09 F&C and Altamar F&C Private Equity, the private equity fund of funds division of F&C Asset Management, www.privateequityonline.com both close has held a first close of Aurora Fund, a secondaries-focused vehicle, on€ 30m. The secondaries- vehicle will invest in secondary fund interests in European mid-market funds, and has focused funds closed its first transaction, acquiring the private equity fund interests of Landsbanki. Meanwhile, Altamar Private Equity, a Spanish fund of funds manager, has just held a final close on its fourth fund, Altamar Secondary Opportunities IV, which will be its first to exclusively target secondaries. It has raised €65m exclusively from Spanish institutional investors. The firm will add this latest€ 65m to the €80m of dry powder it still has available from previous funds to pursue global secondaries investments. 15-Dec-09 Partners Group Partners Group, the Switzerland-based asset manager, has reached its €2.5bn hard cap www.partnersgroup.com raises €2.5bn for for Partners Group Secondary 2008, exceeding its original €2bn target. Limited partners secondaries include corporate and public pension plans, insurance companies, family offices and endowments. The fund seeks to capitalize on discounted secondary opportunities. 14-Dec-09 Marlin closes California-based turnaround firm Marlin Equity Partners has closed Marlin Equity III on www.marlinequity.com third fund in three US$650m. The fund will invest in businesses undergoing financial, operational or market months driven change in a variety of sectors. The oversubscribed fund exceeded its original US$450m target after a very brief marketing period beginning in September 2009. 2 The Brief: 18 December 2009 | Issue 43 Private Equity Opportunities - Asia-Pacific Punjab Chemicals and Crop Protection in talks with private equity funds to restructure debt, MD says Date Value Currency Value Sectors Companies Countries Intelligence Grade (M) Description 15-Dec-09 159 US$ Revenues Chemicals and materials; Ernst & Young; Punjab Australia; Confirmed for the year Medical: Pharmaceuticals Chemicals & Crop Protection India; USA ending Ltd; Motilal Oswal Financial March 09 Services; Elara Capital Story Punjab Chemicals and Crop Protection (PCCPL), the listed Mumbai, India-based agrochemicals company, is in talks with private equity funds to restructure its debt, said Managing Director Shalil Shroff. It is also in talks with a Canadian company to sell its bulk drug business, he added. The funds raised through the sale of this business could also be used to restructure its debt and focus on its agrochemicals business, he said. The business registered annual revenue of INR700m (US$14m) and has 200 employees. It could either sell its bulk drug business or offer a 30% stake in it to a strategic player, he added. Meanwhile, it intends to bring its leverage down to 30%-40%. It is holding direct talks with funds regarding a fresh issuance of shares and some minority dilution in its subsidiary companies, he said. It would be open to advisory approaches from financial advisors and other potential investors. PCCPL plans to raise US$20m by first quarter 2010, followed by US$40m by third quarter 2010, Shroff added. Earlier capital raising plans were stalled by market conditions. Elara Capital and Motilal Oswal were the advisors at that point, he said. Ernst & Young is PCCPL’s auditor. The company registered sales of INR7.5bn for the year ended March 2009. It has debt of INR5bn, of which INR3bn is acquisition debt and the remainder bank borrowings. PCCPL acquired agrochemicals company Sintesis Quimico in Argentina in 2006 for US$10m, following which it acquired Pegevo Beheer in Netherlands in 2007 for €40m, according to media reports. It could resume its acquisition strategy in North America or Australia after its restructuring, potentially after the second half of 2010, Shroff said.