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					                                                                                    Morgan Noble

Private Equity Market Report: November 12th, 2007
Deals in the Market

Depending on how the deal is structured, Merrill Lynch & Co.’s Merrill Lynch Capital unit could be valued at $1 billion to
$3 billion in an auction reportedly dominated by private equity firms. Potential suitors for the Chicago-based subsidiary
include General Electric Co., JC Flowers & Co. LLC, Aquiline Capital Partners LLC, and TPG.

Kansas City-based Interstate Bakeries Corp., the maker of Hostess Twinkies and Wonder Bread, recently gained
clearance to seek creditors' approval of a reorganization plan for exiting three years of bankruptcy. The plan involves $400
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million in financing from hedge fund Silver Point Finance LLC, as well as an additional $180 million in value from debt-to-
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equity swaps. The U.S. Bankruptcy Judge also allowed for the consideration of alternative offers, and a potential auction of
the company if necessary. The International Brotherhood of Teamsters (a worker’s union which represents about 9,500
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of the company's 25,000 employees) opposes the Silver Point deal, and is currently working with listed Mexico baker Grupo
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                                                                i
Bimbo and LA private equity firm The Yucaipa Companies to come up with a competitive counter offer. According to
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Standard and Poor’s, Interstate generates $53 million of EBITDA on $2.92 billion in sales.
                                                        y
                                                    lle Inc. has moved into the second round of its Lehman-run
Missouri-based teddy-bear retailer Build-A-Bear Workshop
                                                 ne
auction, allegedly dominated by private equity bidders including Oak Hill Capital. The target, which in 2001 received a
                                             on
$21.5 million private placement from Catterton Partners and The Walnut Group, is valued at 6 times EBITDA, or $425
million. (Mergermarket)                    D
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Orlando’s casual dining business Darden Restaurants Inc., which generates roughly $6 billion in annual sales, is currently
discussing the sale of its Smokey Bones Barbeque & Grill chain to nearby private equity firm Sun Capital Partners Inc.
Darden, which also operates the Red Lobster, Olive Garden and LongHorn Steakhouse chains, has allegedly received
several proposals, and retains the right to negotiate with other bidders if a deal with Sun Capital cannot be reached within
30 days. (DowJones)

Wachovia Securities is handling the sale of Kentucky-based Triple Crown Media Inc., the listed former newspaper division
of Gray Television Inc. which may fetch over $200 million from bidders including private equity firm Wicks Group of Cos.
LLC, and strategic bidders Morris Communications Co. LLC, Evening Post Publishing Co., Cox Communications
Inc., Landmark Communications Inc., and Ogden Newspapers Inc. According to Standard & Poor’s, Triple Crown
generates $17.4 million of EBITDA on $130 million in total revenue. (TheDeal)

Weston Presidio-backed California hair care business Sexy Hair Concepts LLC may draw up to 10 times EBITDA ($200
million) in its auction, run by Wachovia. (Mergermarket)

International Deals in the Market

A letter of intent has been signed by Sun Capital Partners and Germany’s Arcandor AG regarding the sale of the
department store operator’s online shopping unit Neckermann.de GmbH to the Boca Raton buyout shop. Though the size
of the deal is not known, Neckermann.de posts roughly €1.3 billion ($1.9 billion) in sales – 20 percent of Arcandor’s mail-
order revenue. The transaction is expected to close by the end of the month. Goldman Sachs and Credit Suisse group are
advising Arcandor. (TheDeal)



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                                                                                                                             Page 1
                                                                                Morgan Noble

Private Equity Market Report: November 12th, 2007
The auction for Italian mobile services conglomerate Wind/H3GI's transmission towers currently includes Fortress, Carlyle,
Abertis, Sirti, Macquarie, TDF, Babcock & Brown, DMT, Clessidra, F2I, Sintonia, and US broadcasting group Crown
Castle. According to reports, 50.1 percent of the new company, which will control transmission towers, will be up for sale.
Bid submissions, expected to be between €1.5 and €2 billion, are due today. (Financial Times)

Mexican grocer Grupo Gigante SAB de CV has reportedly garnered interest from Boston private equity firm Advent
International Corporation. Gigante is currently in the auction process, and is expecting offers – which may reach $1 billion
– to be presented this week. (El Universal)
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South Korea’s National Pension Service and Macquarie Bank have together bid an undisclosed sum to acquire a 40
                                                                           Eq
percent interest in Korean telecommunications business Hanaro Telecom. Macquarie is among several bidders hoping to
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take a 39.36 percent stake from AIG and TPG Newbridge Capital. Hanaro generates $577 million of EBITDA on $1.9
billion of sales. (Financial Times)                             v  i
London buyout shop Bridgepoint Capital has hired Rothschild,
                                                               Pr Citigroup, and JPMorgan to help determine whether to
                                                           ey
pursue an IPO or auction of its pet store portfolio firm,llPets at Home Ltd. In 2004, Bridgepoint acquired UK-based Pets for
                                                     ne and his family. For the year ended last March, Pets generated
£230 million, buying out minority stakes held by rival private equity firms 3i Group plc and Cinven Ltd., as well as a large
                                                on million) in sales.
portion of the 62 percent held by founder Robert Preston
                                             D
£46.7 million of EBITDA on £306.5 million ($638.9
                                          R
 Updates on Existing Deals             R
The trial date for the dispute between Sallie Mae and the JC Flowers-led investor group seeking to terminate its proposed
$25 billion buyout of the student lender has been tentatively set for July of next year. The investors, which include Friedman
Fleisher & Lowe, JP Morgan Investment Advisors, and Banc of America Equity Partners, argue that recent student-
loan legislation and the struggling credit markets have impacted VA-based Sallie Mae enough to justify nullification of the
$60 per share deal, without payment of the stipulated $900 million breakup fee. Sallie Mae has argued that the buyout
agreement has kept it from exploring interest from other potential suitors.

For the second time this year, London supermarket operator J Sainsbury plc watched its suitor walk away from a potential
buyout deal, this time taking more than a fifth of Sainsbury’s market cap with it. The target’s shares closed down 115 pence
– or 20.72 percent – to 440 pence when Qatar government-backed Delta Two Ltd. chose to end talks about an £11.8 billion
($24.7 billion) takeover. Following the Sainsbury’s insistence upon an additional £500 million in equity, Delta cited funding
uncertainty and the current instability of global credit markets as the reason for its withdrawal.

Underwriters have pulled Guitar Center Inc.'s $750 million bond offer, meant to be part of the financing for Bain Capital's
$2.2 billion acquisition of the music retail chain. The bonds were rated triple-C by Moody's Investors Service and Standard &
Poor's Ratings Services. The $650 million of loans expected to trade at 98 cents were instead brought to market by JP
Morgan at 97 cents last week, the result of a generally weaker loan market. Most assume the underwriters will reintroduce
the bond issue when market conditions improve.




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                                                                                                                         Page 2
                                                                                Morgan Noble

Private Equity Market Report: November 12th, 2007
Providence Equity Partners Inc. may not follow through on its $1.2 billion takeover of 56 Clear Channel
Communications Inc. television stations, a shift which follows the San Antonio target’s announcement that its $27.45
billion buyout by Bain Capital and Thomas H Lee may not close until the first quarter of next year. Providence, allegedly
hardening to the deal because the stations haven’t recently performed as well as was hoped, may chose to renegotiate the
purchase price, or even pay the $45 million break up fee to terminate the deal. A withdrawal by Providence may weaken the
Bain and TH Lee deal, as shareholders will grow especially sensitive to any perceived shifts in the stance of the funding
banks, etc.

Announced Transactions
                                                                               u ity
American Capital Strategies Ltd. and management of the Texas carpet     Eq cleaner have acquired Rug Doctor, L.P. for an
undisclosed sum. American Capital is funding the takeover with aat
                                                                     e
                                                                   revolving credit facility, a first lien senior term loan, senior
                                                               riv of premium steam cleaning carpet care machines,
and junior subordinated debt, holding company notes and preferred and common equity. Rug Doctor, which last year had
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sales of over $300 million, is the leading manufacturer and marketer
renting machines to over six million consumers annually.y   Houlihan Lokey Howard and Zukin served as financial advisor to
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                                                    el
Rug Doctor, which tapped the financial services of Phillip Roman and Company. (Mergermarket)

                                              o nn to acquire home furnishings retailer Restoration Hardware Inc. for
Catterton Partners has signed a definitive agreement
                                            D
$260.15 million. Catterton's $6.70 a share cash offer values Restoration's equity at $267 million, and carries a 150 percent
                                         R
premium to the target’s $2.68 closing price last week. The transaction, subject to two-thirds shareholder approval and
                                       R to any financing condition and is expected to close in the first quarter of next
customary regulatory approval, is not subject
year. Gibson, Dunn & Crutcher, L.L.P. is Catterton’s legal counsel on the deal.

Roark Capital Group and the management of Batteries Plus LLC have taken the battery retail chain private in a sale of
undisclosed value. Wisconsin-based Batteries Plus posted 2006 revenues of roughly $200 million. Merrill Lynch Capital and
New Canaan Partners provided debt financing for the deal. Houlihan Lokey Howard & Zukin acted as financial advisors to
Batteries Plus, which hired Godfrey & Kahn SC for legal advice. King & Spalding LLP and DLA Piper served as legal
advisors to Roark Capital.

Honeywell International Inc. has acquired Indiana-based Maxon Corp. for $185 million in cash. Honeywell plans to merge
the industrial combustion equipment manufacturer with its own Environmental and Combustion Controls (ECC)
business. Private equity firm Hammond, Kennedy, Whitney & Co., which joined management in buying Maxon in 2004 for
an undisclosed price, owns a majority of the company. The agreement is subject to customary closing conditions, including
regulatory review. Harris Williams LLC acted as financial advisor to Maxon Corporation.

Natural gas distributor EnergySouth Midstream and Fortress Investment Group LLC have agreed to acquire natural gas
storage company Mississippi Hub LLC for $140 million in cash. EnergySouth, a unit of publicly traded EnergySouth Inc.
will arrange financing for ESM’s portion of the deal, involving a 60 percent stake; Fortress will own the remaining 40 percent
in the Louisiana-based target. The transaction is expected to close by the end of the year. Skadden, Arps, Slate, Meagher &
Flom LLP and Onebane Law Firm advised Mississippi while Dewey & LeBoeuf LLP and Shearman & Sterling LLP acted as
legal advisors for EnergySouth and Fortress.




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                                                                                                                             Page 3
                                                                                      Morgan Noble

Private Equity Market Report: November 12th, 2007
San Francisco buyout firm Industrial Growth Partners has acquired Chicago-based Atlas Material Testing Technology,
a manufacturer of instruments which test the impact of weathering on materials. Terms of the deal were undisclosed. GE
Antares is arranging a $48 million senior credit facility for the buyout, which involves a $24 million U.S. facility and a €16.7
million ($24.3 million) European facility. Atlas generates $85 million in annual revenues, according to Standard & Poor’s.
(DowJones)

Announced International Transactions

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Parisian LBO shop Wendel has allegedly increased its stake in listed French specialty glass maker Compagnie de Saint-
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Gobain from 11.8 percent to 15.5 percent of the company's shares (or 14.8 percent of its voting rights). Since September,
Wendel has acquired 58.1 million Saint-Gobain shares for around €4.25 billion ($6.24 billion.) The French private equity firm
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claims it does not seek control of the company, but instead wishes "to pursue this friendly and constructive" discussion, and
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may consider joining Saint-Gobain's Board of directors. Gobain reports €5.4 billion of EBITDA and €42.8 billion of revenue.
(DowJones)                                                   Pr
                                                            y
                                                        lle systems supplier Kelvin Hughes Limited in a deal valued at
                                                     ne funding depending on future performance. Kelvin reports $70.5
ECI Partners LLP has acquired British navigation and radar
£48 million ($99 million), with up to £4 million ofnadditional
                                                 o
million in annual revenue. ING Corporate Finance provided financial advice to ECI while SJ Berwin LLP provided counsel.
                                               D
KPMG Corporate Finance LLC and law firm Allen & Overy LLP advised Smiths. Liberty Corporate Finance and law firm
                                          R management. (TheDeal)
Addleshaw Goddard LLP advised company   R
Portfolio Company News

Oak Hill Capital Partners has agreed to acquire metal component producer Firth Rixson Limited from Lehman Brothers
Private Equity and The Carlyle Group for £945 million ($1.95 billion). Carlyle bought Firth Rixson in 2003 in a deal valued
at £106 million, and later – in 2006 – sold a 36 percent stake to Lehman for an undisclosed sum, keeping 50 percent for
itself. The remaining 14 percent is held by management, who will remain significant investors in the company after the deal
closes. Firth generates £20 million of EBITDA on £200 million of sales. Paul, Weiss, Rifkind, Wharton & Garrison LLP and
Macfarlanes provided legal counsel to Oak Hill. Carlyle tapped the financial advisory services of Lehman Brothers, while
Latham & Watkins LLP served as counsel. (DowJones)

Paris-based broadcast tower operator TDF SA has agreed to buy Deutsche Telekom AG's broadcasting-equipment
division for €850 million ($1.3 billion). TPG and AXA Private Equity last year took 60 percent of TDF during a
recapitalization that diminished the stakes of its private equity owners, Caisse des Dépôts et Consignations and London-
based Charterhouse Capital Partners LLP. No further details were disclosed. (TheDeal)

Middle Eastern investment firm Dubai International Capital has bought UK-based diagnostic imaging centre Alliance
Medical from Bridgepoint Capital Limited for £600 million ($1.25 billion). Alliance’s current EBITDA is £56 million,
compared with the £9.9 million of EBITDA the company generated when Bridgepoint acquired it for £86 million in 2001.
Dresdner Kleinwort and Bank of Scotland are providing financing to DIC for the acquisition, which is subject to the
appropriate regulatory approvals. KPMG Corporate Finance United Kingdom served as financial advisor for Bridgepoint,



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                                                                                                                               Page 4
                                                                                               Morgan Noble

Private Equity Market Report: November 12th, 2007
which tapped Travers Smith and Simmons & Simmons for legal counsel. Goldman, Sachs & Co. and
PricewaterhouseCoopers Corporate Finance France provided financial advice to DIC, which hired Linklaters for legal
advice. (PrivateEquityInternational)

Acon Investments has sold Brazilian supermarket operator G. Barbosa Comercial Ltda. to listed Chilean food retailer
Cencosud SA for $430 million. GBarbosa reportedly generates $42 million of Ebitda on $1.1 billion of revenue, and is
assumed to have an enterprise value of more than $500 million. The sale translates into a 13.5 times return for Acon just 3
years after its initial investment in the portfolio company. (DowJones)
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Providence Service Corp. has agreed to acquire Atlanta-based Logisticare, Inc. from Charterhouse Group Inc.,
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Summit Partners and AlpInvest Partners Inc. for approximately $260.16 million, or 9 times the company’s estimated 2007
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EBITDA. Transport management solutions business LogistiCare reported revenues of $319 million for the year ended last
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September. Providence CIT Capital Securities LLC has committed to provide a $253 million senior secured credit facility
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while RBC Capital Markets has arranged $70 million in privately placed convertible senior subordinated notes for the
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transaction. Charterhouse, Summit and AlpInvest took LogistiCare private for $155 million with a $100 million equity
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                                                          el
investment in August 2004. The transaction, subject to the satisfaction of customary closing conditions including Hart- Scott-
Rodino clearance, is expected to close by the end of the year. Morgan Stanley and CIT Capital Securities LLC acted as
                                                     nn
financial advisors to Providence, which hired Proskauer Rose LLP for legal advice. Blank Rome LLP and William Blair &
                                                   o
Company, L.L.C. advised Logisticare. (DowJones)D
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Gores Technology Group LLC has acquired Michigan-based United Road Services, Inc., the nation's leading provider of
vehicle logistics services, from Charterhouse Group Inc. and KPS Capital Partners for a reported $110 million. Wachovia
Bank NA and hedge funds Crystal Capital, Garrison Investment Group LP and GB Merchant Partners LLC are providing
financing for the takeover of United, which has projected 2007 sales of $217 million and current EBITDA of $10.3 million.
United tapped Houlihan Lokey for financial advice Proskauer Rose LLP for legal counsel. Bingham McCutchen LLP
provided legal advice to Gores. (Mergermarket)

Private equity-backed German fire protection products business Minimax GmbH and Co. KG has agreed to acquire its CA-
based rival Consolidated Fire Protection from Gryphon Investors for a rumored $200 million. San Francisco-based
Gryphon reportedly saw a 3 times return on its 2005 investment in the portfolio firm, a number which translates into an IRR
of over 50 percent. CFP generates roughly $25 million of EBITDA on $150 million of revenue, meaning Minimax (owned by
London buyout firms Industri Kapital Limited and Intermediate Capital Group PLC) paid a purchase multiple of about 8
times EBITDA. William Blair acted as financial advisor, and Kirkland & Ellis acted as legal advisor to CFP and Gryphon
Investors. (DowJones)

Brazilian buyout firm GP Investments has sold its stake in local utility Equatorial Energia SA to Rio de Janeiro bank
Banco Pactual S.A. for approximately $120 million. The deal must be approved by Brazil's electric energy agency Aneel.
No further details were disclosed. (DowJones)




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                                                                                                                                        Page 5
                                                                            Morgan Noble

Private Equity Market Report: November 12th, 2007
Portfolio Company Financings and Offerings

Hellman & Friedman has sold roughly 23.5 million shares ($1.07 billion worth) of Nasdaq Stock Market Inc. in a
secondary offering underwritten by Morgan Stanley. Shares of Nasdaq closed at $45.40, down $1.81, with roughly 113.8
million shares outstanding. In 2001 H&F bought $240 million of Nasdaq bonds, worth a 9.8 percent equity holding; in 2005
H&F and Silver Lake Partners acquired a combined $205 million of Nasdaq bonds, worth an undisclosed stake. According
to the filing, Silver Lake expected to sell up to 11.3 million shares ($513 million). Nasdaq generates $430 million of EBITDA
on roughly $2.2 billion of revenue, and recently agreed to purchase the Philadelphia Stock Exchange for $652 million.
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Morgan Stanley served as underwriter. Skadden, Arps, Slate, Meagher & Flom LLP was counsel to the selling stakeholders.
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WA-based life insurance company Symetra Financial Corporation has         Eq postponed its $750 million IPO due to “stock-
                                                                       e
market turbulence.” Symetra, which planned to sell 39.5 million tcommon shares for $18 to $20 apiece, is backed by
                                                                    aManagement, Highfields Capital Management, Vestar
Berkshire Hathaway Inc., Caxton Associates, Och-Ziff Capital
                                                             P
Capital Partners (which owns a 6.6 percent stake), J.C. Flowers
                                                                riv & Co. and CSFB Private Equity (which both own 2.3
percent). (DowJones)                                       y
                                                        le
                                                      el Banking are planning a public offering of 23 million shares in
TPG, Bain Capital LLC, and Goldman Sachs Merchant
Miami-based Burger King Holdings Inc. While theo nn fast food business is not selling any shares, the 58 percent stake held
                                            D
by the buyout trio will be reduced to 41 percent post-offering – 38 percent if the underwriters exercise a 3.45 million share
                                         R
greenshoe option. The flotation is expected to raise roughly $620 million at the current $27 share price. TPG, Bain and
Goldman acquired Burger King in 2002   Rfor $2.6 billion, and later took the company public in February of 2006. Burger king
generates $416 million of EBITDA on $2.3 billion in sales. Goldman Sachs & Co., J.P. Morgan Securities Inc. and Morgan
Stanley & Co. will act as joint book-running managers for the offering.

TPG, TPG Newbridge Capital and General Atlantic LLC are looking to raise up to $374 million with the sale of 350.5
million Lenovo Group Ltd. units. Shares of Hong-Kong listed Lenovo, a technology services company based in Purchase,
NY, are expected to price between $1.05 and $1.07. TPG, Newbridge and General Atlantic invested a total of $350 million
in Lenovo in 2005 to support its acquisition of IBM Corp.'s personal-computer business. Goldman Sachs Group Inc. is the
bookrunner for Lenovo, which generates $581 million of EBITDA on $15,772 billion of revenue.

JH Whitney Capital Partners LLC and Value Holdings LLC are planning to sell 381.6 million shares (23.8 percent) of
hedge fund Value Partners Ltd. in its initial public offering, expected to raise up to $373 million. The IPO, never before
done by a fund-management firm in the Asia ex-Japan region, could raise a maximum of $403 million if an overallotment
option is exercised. JPMorgan Chase & Co. and Morgan Stanley are managing the IPO, slated to list on the Hong Kong
bourse November 22nd. (DowJones)

In order to avoid paying financing fees to third parties, Kohlberg Kravis Roberts & Co. has for the first time taken on the
role of a “joint book running manager” in its $350 million offering of shares in NJ-based specialty chemicals company
Rockwood Holdings Inc. KKR and its co-investor, DLJ Merchant Banking Partners plan to sell nearly 10 million of the
49.4 million shares they own, taking their combined ownership of Rockwood from 66.3 percent down to 52.9 percent. KKR,
which invested $547 million in Rockwood between 2003 and 2004, will realize a 170 percent gain; DLJ, which invested $159
million in 2004, will see a 240 percent gain. Rockwood generates EBITDA of $603 million on $3.2 billion of revenue. Credit
Suisse Group, Goldman, Sachs & Co. and UBS are joint bookrunning managers of the offering. (TheDeal)


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                                                                                                                        Page 6
                                                                                               Morgan Noble

Private Equity Market Report: November 12th, 2007
China Nepstar Chain Drugstore Ltd.'s 20.6 million share IPO has priced at $16.20 apiece, ahead of the expected $11.50
to $13.50 a share ($334 million total). 30 percent-owner of the Chinese retail drugstore business, GS Capital Partners does
not plan to sell any shares, but will still see its stake reduced to 24.4 percent. GS Capital acquired its stake in 2004 with a
$40 million investment, intended to expand Nepstar. The company's chairman, Simin Zhang owns a 64.8 percent stake,
diluted to 51.88 percent post-IPO. Goldman Sachs (Asia) LLC, Merrill Lynch & Co. and CLSA Asia-Pacific Markets are
underwriting the offering with an option to purchase up to 3.09 million additional ADSs to cover overallotments. According to
Standard & Poor’s, Nepstar generates $20.2 million of EBITDA on $254 million of sales.

                                                                                                 ity
GTCR Golder Rauner LLC netted $265.4 million with the sale of 17.9 million Syniverse Holdings Inc. shares in a
                                                                                               u
secondary stock offering for $15.50 apiece. In 2002, Tampa-based Syniverse, a wireless communications technology
                                                                                          Eq
company formerly known as TSI Telecommunication Services Inc., was acquired by GTCR for roughly $225 million of
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                                                                                 at
equity in a $770 million deal. The recent offering cut GTCR’s holding to 21.5 million shares, a 31.5 percent stake now
                                                                               v
valued at $340.7 million. Syniverse generates $145.2 million of EBITDA on $361.9 million of revenue, according to Standard
                                                                           i
& Poor’s.                                                             Pr
                                                                  y
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                                                          el
Houston-based natural gas compression services company CDM Resource Partners LP has set the price range for its 7
million unit IPO at between $19 and $21 a share (up to $169 million total). In 2003 Carlyle Group and Riverstone
                                                     nn
Holdings LLC invested $50 million in the partnership to own a 53 percent interest in the company; their collective stake will
                                                   o
                                               D
fall to 47.6 percent post-IPO. Lehman Brothers, Merrill Lynch & Co., Goldman Sachs & Co., Wachovia Securities and
                                           R
TudorPickering are underwriters to the offering, with the option to purchase up to 1.05 million additional common shares to
                                       R
cover overallotments. CDM plans to list on the NYSE. (DowJones)

Yorktown Partners LLC-backed Colorado oil and gas company Ellora Energy Inc. has for the second time upped the size
of its planned IPO, from 8 to 8.97 million shares, expecting to receive proceeds of $117 million. Ellora plans to sell 8 million
shares, and certain selling stockholders will offer 969,023 shares, while the underwriters (A.G. Edwards & Sons Inc.,
Friedman, Billings, Ramsey & Co., Raymond James & Associates Inc. and KeyBanc Capital Markets) retain the option to
purchase up to 1.35 million additional shares from to cover overallotments. Ellora was formed in 2002 with $20 million of
equity capital from Yorktown Energy Partners V LP. Yorktown now owns about 61.2 percent of the portfolio firm, a stake
which will reduce to 52 percent post-IPO. Ellora Energy is hoping to list on the Nasdaq Global Market under the symbol
LORA. (DowJones)

TA Associates-backed Lumber Liquidators Inc.'s 10 million share IPO has priced at $11 a share, below the expected
range of $12 to $14 a share. VA-based Lumber Liquidators, the largest specialty retailer of hardwood flooring in U.S., plans
to sell up to $150 million in common stock in the offering. The company said it's offering 3.8 million shares in the IPO; the
rest will be sold by stockholders, including TA, which plans to sell almost 2.6 million shares for roughly $28 million. TA paid
$35 million for a 35 percent stake in the company in 2004, and will hold a post-IPO stake of 20.1 percent. For the six months
ended last June, Lumber Liquidators reported net income of $4.6 million, falling from $8.4 million in the 2006 six-month
period. The business plans to list on the NYSE under the stock ticker LL. Goldman Sachs & Co., Merrill Lynch & Co.,
Lehman Brothers, Banc of America Securities LLC and Piper Jaffray were listed as underwriters for the offering.




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                                                                                                                                        Page 7
                                                                             Morgan Noble

Private Equity Market Report: November 12th, 2007
Ares Management LLC-backed SandRidge Energy Inc.’s shares rose 23 percent on its first day of trading, closing at $32
a share on the NYSE, up from its IPO price of $26. Ares, which chose not to participate in the offering, owns 13.3 million
shares in the natural gas and oil exploration business (a 12.3 percent stake that has since been diluted to 9.8 percent)
which it purchased for $250 million just last February – that stake should now be worth $426 million. Tom Ward, the
company's chairman, chief executive, and largest shareholder, owns more than 26 percent of the company post-IPO. An
entity controlled Ward agreed to buy 4.17 million shares at the offering price. SandRidge granted the underwriters (Lehman
Brothers, Goldman Sachs & Co., Banc of America Securities LLC, Bear Stearns & Co. Inc., Credit Suisse, Deutsche Bank
Securities, JPMorgan, UBS Investment Bank, Howard Weil Inc., Raymond James, RBC Capital Markets, Simmons & Co.
                                                                               ity
International and TudorPickering) a 30-day option to purchase up to 3.68 million additional shares. For the six months
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ended June 30, SandRidge reported revenue of $308.1 million. SandRidge is trading on the NYSE under the ticker SD.
(DowJones)                                                              Eq
                                                                     e
                                                                  at is aiming to sell 5.45 million shares in a stock offering
                                                              riv
Charlotte-based non-woven materials business Polymer Group Inc.
priced at $26 to $29 a share, giving it a market value of $630 million and an enterprise value of roughly $950 million (7.8
                                                            P
                                                         y
times EBITDA). MatlinPatterson Global Opportunities Partners LP owns 13.6 million shares in the company, a 71
                                                      le
                                                    el MatlinPatterson's investment has risen 89 percent to $357 million.
percent stake, which it acquired in 2003 for $189 million during the company’s Chapter 11 reorganization. Based on
Polymer's current stock price of $26.30, the value of
                                                  n
Polymer will sell 3.64 million new shares in then
                                              o  IPO, from which the estimated proceeds of $92.8 million will be used to
                                            D
reduce long-term debt ($413 million). J.P. Morgan Securities, Citigroup Inc., Deutsche Bank Securities Inc., Robert W. Baird
                                         R
& Co. and KeyBanc Capital Markets are underwriting the offering, with an option to purchase up to 818,000 additional
                                       R
shares from MP to cover overallotments. No further details were listed. (TheDeal)

On its first day of Nasdaq trading, WV-based online education provider American Public Education Inc.'s shares closed
up 79.6 percent from their initial public offering price of $20, making it the third-best stock debut of the year. 4.7 million
shares were traded at between $30 and $35.92 a share, drastically above the expected range of $18 to $19 a share, valuing
the offering at roughly $160 million. Private equity-backers ABS Capital Partners – which now holds 40.1 percent of APEI
(57.9 pre-IPO) – and Camden Partners – which holds 9.9 percent (14.3 percent pre-IPO) – did not participate in the
offering; both invested $8 million in the company two years ago, after ABS had made an earlier $12 million investment in
2002. William Blair & Co., Piper Jaffray, Stifel Nicolaus, ThinkEquity Partners LLC, BMO Capital Markets and Signal Hill
were underwriters for the IPO. APEI is listed on the Nasdaq under the symbol APEI.

VA-based ICx Technologies Inc. was forced to cut its 5 million share IPO price by 20 percent in order to complete the
offering. ICx closed at $12.85 a share on the Nasdaq, down from its IPO price of $16, and significantly below its expected
range of $17 to $19, which was set by book-running manager Lehman Brothers Holdings Inc. Wexford Capital’s private
equity arm invested roughly $110 million in the homeland security equipment business about a year ago, and now holds a
64.7 percent stake post-IPO. No further details were disclosed. (DowJones)

Fund News

Houston-based EnCap Investments LP’s Encap Energy Capital Fund VII LP has reportedly raised $2.3 billion to date, and
is expected to close on its $2.5 billion hard cap in the next 30 days. Fund VI closed on $1.5 billion last year.




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                                                                                                                         Page 8
                                                                                  Morgan Noble

Private Equity Market Report: November 12th, 2007
Minnesota-based employee owned investment manager Wayzata Investment Partners has held a $1.8 billion second
closing on Wayzata Opportunities Fund II LP, targeted at $2.5 billion with a $3.5 billion hard cap. A final close for the fund –
whose predecessor raised $12.5 billion in 2003 – is expected in the first quarter of next year.

KRG Capital Partners LLC’s fourth mid-market buyout fund closed on $1.96 billion, more than twice the size of Fund III,
which closed on $715 million in 2004.

Oak Hill Capital Partners has held a first close of its third buyout fund on $1.57 billion, well on its way to the vehicle’s $4.5
billion target. Oak Hill Capital Partners II, L.P. closed on $2.5 billion in 2004.
                                                                                  u ity
                                                                             Eq
The Carlyle Group has closed its first infrastructure-focused fund on $1.15 billion. Carlyle Infrastructure Partners will seek
                                                                         e
                                                                    at
to invest in North American transportation and water projects ranging in enterprise value from $100 million to more than $1
billion.                                                          v
                                                                  i
                                                                Pr equity investor affiliate of New York Life Investment
New York Life Capital Partners, the fund of funds and privatey
                                                          le
Management, has closed its second mezzanine fund l$200 million above target at $800 million. NYLIM Mezzanine Partners
                                                      ne
II, L.P. is almost twice the size of its predecessor, which closed on $475 million in 2002.

Boston-based HarbourVest Partners plansD list   to
                                                  on a new fund of funds on the Amsterdam NYSE Euronext, looking to raise
                                             R
$400 million with the IPO. The offering for the fund, meant to target wealthy investors willing to stay on for over ten years,
                                           R
will be advised by Lehman Brothers, Deutsche Bank and Goldman Sachs. (Mergermarket)

HR News

Andrew Gray, formerly of Francisco Partners, has joined Sydney-based buyout firm Archer Capital Pty Ltd as a partner.
Archer is currently investing its fourth fund of $1.5 billion.

Joining from CIT Group, Frederick "Rick" Wolfert has been appointed a senior adviser at Aquiline Capital Partners LLC,
where he will be assisting the firm in evaluating opportunities in the commercial and specialty finance sectors.

James Slipper is the new partner on Gresham Private Equity’s investment team; currently a director at Deloitte and
responsible for the transaction services team in Reading, U.K, he will be based in London but working with the entire group.
Slipper has worked with Gresham on its financial due diligence for the past three years, advising on numerous deals
including 1st Credit Ltd., Swift Technical Ltd., Town Centre Restaurants Ltd. and West Cornwall Pasty Company Ltd.

In a move to expand throughout Latin America, Brazilian buyout firm GP Investments has opened an office in Mexico City
where existing partner, Marcio Tabatchnik Trigueiro, will lead the new office.

The Blackstone Group has hired Alan Muney, a Veteran pediatrician and managed health care expert, to be an executive
director in the firm’s private equity group. Muney is responsible for managing the healthcare benefits of Blackstone’s 52
portfolio companies, part of a broader trend in private equity as firms seek to aggregate the buying power of portfolio
companies with similar cost-cutting programs.



                                                                         Contact PrivateEquity@rrd.com with suggestions/comments
                                                                                                                            Page 9
                                                                                 Morgan Noble

Private Equity Market Report: November 12th, 2007
Three senior private equity professionals have joined Carlyle Group’s Warsaw office: managing director Janusz Guy
comes from Spectra Holding; director Aleksander Kacprzyk was previously with McKinsey & Co; and director Piotr Nocen
arrives from 3TS Capital Partners.

Lightyear Capital LLC has hired John Shettle, former president and CEO of underwriting manager Schinnerer Group, as
a senior adviser.

Pantheon Ventures has welcomed a new partner to its U.S. investment team: Chicago-based Dennis McCrary, previously
                                                                                   ity
a partner at Adams Street Partners, will be charged with developing and overseeing a U.S. co-investment strategy for the
                                                                                 u
firm's clients, while simultaneously involved in all aspects of Pantheon's U.S. fund activity.
                                                                            Eq
                                                                        e
                                                                   at
Champ Private Equity, the Australian firm in which Castle Harlan has a 50 percent interest, is set to open an office in
Singapore.                                                       v
                                                              i
Pars Purewal will oversee hedge funds, private equityyand
                                                           Prreal estate as the new head of its alternative investments
                                                     le
                                                   elretaining his current role as investment management and real estate
practice at PricewaterhouseCoopers LLP. Purewal, with PwC since 1995, will be responsible for coordinating
PricewaterhouseCoopers' services in the sector while
                                                nn
leader. Purewal also sits on the PricewaterhouseCoopers European and global investment management leadership teams.
                                              o
                                            D
Dubai-based private equity firm IstithmarR opened a new office in Shanghai as it seeks to build a presence in China.
                                          has
                                       R
Two private equity executives are soon to be the chairmen of two Federal Reserve banks: Stephen Friedman, chairman of
Stone Point Capital LLC and director of President Bush's National Economic Council from 2002 to 2004, will become
chairman of the New York Fed's board next year; John A. Canning Jr. was named chairman of the Chicago Fed's board.
Canning is co-founder and chairman of Madison Dearborn Partners LLC in Chicago.

Connecticut middle-market firm Pegasus Capital Advisors welcomes Jeffrey B. Scott a limited partner and operating
adviser responsible for scouting deals in the upstate New York region.

Amsterdam buyout firm AlpInvest Partners NV has hired three new professionals: Chris Perriello, former principal at Paul
Capital Partners and Michael Hacker, previously an associate director with UBS Investment Bank's secondary advisory
group, have joined the New York office as principals; Gunter Waldner, an investment manager, joins from the European
investment banking division of Lehman Brothers and will be located in Amsterdam.

Miscellaneous PE News

With six weeks still left in 2007, domestic private equity firms have already exceeded last year’s fundraising record of $258.2
billion by $4.8 billion. The continued robustness of private equity’s fundraising ability bodes well for investor confidence in
the industry despite the recent credit crunch slowdown. If private equity firms continue to raise money at the same pace,
the final 2007 tally could easily beat $300 billion. (DowJones)




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                                                                                                                         Page 10
                                                                                           Morgan Noble

Private Equity Market Report: November 12th, 2007
The controversial carried interest tax bill was passed by The House last week, which voted 216-193 to approve the $78
billion overall measure doubling the taxes managers of private equity and other investment funds pay on carried interest
from 15 percent to 30 percent. The hike will provide more than 20 million Americans relief from the impending financial
burden of the Alternative Minimum Tax, raising $50 billion over 10 years to shield 21 million upper-middle-income taxpayers
from an average tax increase of $2000 next year. All 185 of the voting House Republicans and eight Democrats opposed
the measure, which will be considered by the Senate in December. (TheDeal)


North American LBO Deals Yet To Close
                                                                                          u ity
Sponsor                                                                                Company                              Price ($mm)
Ontario Teachers Pension, Providence Equity and Madison                                Eq
                                                                                       BCE                                  48,500
                                                                                   e
Dearborn
Texas Pacific Group and Apollo Group                                        v at       Harrah’s Entertainment               27,800
                                                                        i
TPG Capital and Goldman Sachs Group                                  Pr                Alltel                               27,500
Thomas H. Lee Partners and Bain Capital                          y                     Clear Channel Communications Inc.    27,450
                                                            le
                                                         el
JC Flowers & Co., Friedman Fleischer & Lowe, JP Morgan Chase &                         Sallie Mae                           25,000
Co. and Bank of America
BC Partners                                       o nn                                 Intelsat                             16,400
Apollo Management                             D                                        Huntsman Corp.                       10,600
Fortress Investment and Centerbridge      R                                            Penn National Gaming                 9,400
Blackstone Group
                                      R                                                Alliance Data Systems                7,800
Macquarie Group, Canada Pension Plan Investment Board and                              Puget Energy                         7,400
British Columbia Investment Management Corp.
Source: DowJones




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