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Buying Into the BailoutEven though September is not the start of the year, in some ways it is a time for new beginnings. Children go back to school, football season begins and the private equity community gets back to work after a few lazy weeks at the end of August. This year, getting back to work seemed like it was going to be pretty dreary, that is until the US government announced it would take control of Fannie Mae and Freddie Mac. I view this as good news for the deal-making crowd. The move should accomplish a couple of things, not the least of which being that it has quelled global investors’ fears about the pair going under. It should also help lower mortgage rates. But, most importantly, it could make banks feel more comfortable about writing new business. If it does, the private equity community would benefit tremendously, not to mention the overall US economy. This bailout could set private equity back on track to business as usual. (That is, more lenders willing to lend and a larger number of closed deals. I don’t think we will be going back to the days over leveraging.) Alas, while the bailout is widely touted as a smart move by the government, critics believe it won’t make much of a difference over time and it will increase the US government’s debt, pushing US further into a recession. As a result, the private equity community would not see a pick-up in deal activity. The funny thing for me is that I agree with the critics arguments;
there’s no doubt the government will go deeper into debt, but I
don’t understand what their point is. The GSEs were in a world of
hurt, and other than bailing the two mortgage giants out what were the
options? Arguing that Fannie and Freddie never should have been in their
current position to be begin with may be accurate, but that ship has
sailed, and if Freddie and Fannie had been allowed to go bust we would
be worse off than we are. This certainly seems like a good alternative
to what could have become a serious disaster. danielle.fugazy@sourcemedia.com 
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DEALSMervyn’s Sues its Former PE BuyersThe bankrupt retailer assails PE firms over use of real estate assets in LBO, damages could reach $1 billion. Monomoy Capital Partners Buys KatunMonomoy Capital Partners bought Katun Corp., a supplier of imaging industry supplies, the private equity firm announced, in a deal where terms went undisclosed. Carlyle Singer will continue to serve as the company’s president and chief executive and the PE firm said Minneapolis-based Katun’s senior management would remain intact. Kirkland & Ellis, LLP provided Monomoy’s legal counsel in the acquisition and Ernst & Young provided financial and accounting diligence. M/C Venture Partners and Banc of America Capital Investors Purchase AccentHealthM/C Venture Partners and Banc of America Capital Investors have partnered to jointly acquire AccentHealth, a digital out-of-home media company providing patient health education in physician offices nationwide, from Ascent Media Corp., a subsidiary of Discovery Holding Company. Terms of the transaction were not disclosed. Gryphon Investors Recaps Synteract and Vince & AssociatesGryphon Investors has recapped Synteract Inc. and Vince & Associates Clinical Research in partnership with management and Celerity Partners. Both Synteract and VNA provide outsourced pharmaceutical services to biotechnology and pharmaceutical companies. The management of Synteract and VNA will remain in place and become meaningful shareholders of Synteract Corp., the newly-formed holding company that will now own both businesses. Celerity Partners, which previously invested in Synteract in June 2006 and VNA in November 2007, will remain a shareholder through Synteract Corporation. Terms of the transaction were not disclosed.
The Leading Authority on Corporate Growth.
FIRMSToronto Bullish on SPACsSpecial Purpose Acquisition Companies, now gaining traction on the Euronext, will likely soon find themselves trading on the Toronto Stock Exchange as the number of IPOs continues to stagnate. Blackstone To Open West Coast OfficeThe Blackstone Group plans to open an office in Menlo Park, Calif., hiring former Citigroup technology investment banker Ivan Brockman as a senior managing director to head its West Coast technology corporate banking advisory business. Brockman, who has more than 14 years of technology investment banking experience, will serve as the investment banking coverage counterpart to Chris Pasko, a senior managing director who heads a half dozen-strong team for Blackstone's East Coast technology M&A banking practice based in Boston. Prior to joining New York-based Blackstone, Brockman served as co-head of the West Coast technology investment banking unit at Citigroup, where he led its enterprise systems and software industries banking effort. While at Citigroup, which he joined in 2004, Brockman served on several investment banking committees. Water Street Healthcare Partners Closes $650 Million FundWater Street Healthcare Partners, has closed its second independent private equity fund, Water Street Healthcare Partners II, L.P. with $650 million of investor commitments, exceeding its original target of $600 million. Consistent with Water Street’s first fund, the firm’s second fund will focus on creatively partnering with middle-market companies and divisions of global companies in attractive health care sectors with opportunities for growth. A New PE Firm Is FormedLJH Global Investments and John R. Jonge Poerink have launched LJH Linley Capital, as a new private equity firm that will invest in global mid-sized companies through leveraged buyouts, recapitalizations and growth equity investments in a variety of sectors and regions, including consumer products, industrial and manufacturing. LJH Global Investments, an alternative investment management firm that works with high net worth individuals and families throughout the United States and Europe, is providing interim equity financing that will enable the new firm to make immediate investments ranging from $50 million $800 million in transaction value. National Wind Buys Delphi FinancialNational Wind, LLC, bought Delphi Financial Corp. for an undisclosed sum. The investment bank’s 18-year track record will be put to use supporting communities around the wind projects National Wind runs. The deal is National Wind’s second buy in about a year; it bought in 2007 a consulting firm now known as National Wind Assessments.
Please contact Naz Bayazit to inquire about advertising opportunities with this e-newsletter. Naz.Bayazit@sourcemedia.com.
PEOPLEAdvent Taps Ming As Operating PartnerAdvent brings former Old Navy retail chain president aboard to assist with apparel retail investment focus. KKR Appoints New Senior Japanese AdvisorKohlberg Kravis Roberts has named veteran Shiseido executive Yoshiharu Fukuhara to serve as a senior advisor in Japan. Fukuhara, who serves as honorary chairman of Shiseido and has been with the luxury cosmetics company for the last 55 years, will assist KKR Japan Ltd. chief executive Shusaku Minoda with building relationships in Japan’s corporate marketplace. The grandson of Shiseido founder Arinobu Fukuhara brings strong corporate and operational experience to his new role, having been named president and CEO of Shiseido in 1987 before becoming its honorary chairman in 2001. Lazard Hires Citi Metals/Mining BankerLazard recruited Spiro Youakim to join as a London-based managing director and senior member of its global metals and mining financial advisory group. Youakim was most recently a managing director and head of European metals and mining banker at Citigroup. Youakim, 40, has advised on transactions such as Mittal Steel's acquisition of Arcelor, Anglo American's sale of Highveld Steel & Vanadium to Evraz and Severstal's purchase of Rouge Steel and Lucchini. Youakim began his career at Credit Lyonnais in 1991 and joined Schroders, which was later acquired by Citi, in 1996. He became a managing director in late 2005. Stonehenge Growth Capital Names Vice PresidentStonehenge Growth Capital has named Travis Milks a vice president. Milks was a senior associate with Stonehenge Growth Capital until 2006. Prior to joining Stonehenge Capital in 2006, Milks was an associate in the Investment Banking Group at Morgan Keegan & Company. | |||||||||||
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