Bridging the Valuation Gap -- May 26, 2009: May 26, 2009

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MacFadyen: Crossing the Valuation Gap

The enduring question that continues to ring out from deal circles is how to close the valuation gap. It’s a query that probably belongs on Buddha’s list of unanswerables.

While no remedy exists that completely solves this problem, buyers are increasingly coming up with solutions that at least allow them to avoid the dreaded earnout clause.

Deal pros will always point to seller paper and minority stake deals as potential solutions. In a recent conversation, one growth equity investor came up with an alternative that a few years ago might have been considered unthinkable to any other red-blooded deal pro.

June 9-11, 2009- There’s never been a better time to learn about investing in China…
The Association for Corporate Growth is pleased to announce that the 3rd Annual China International Private Equity Forum (CIPEF) will take place from June 9-11, 2009 in Tianjin, China. CIPEF provides a unique opportunity to learn firsthand about investing in China, network with over 4,500 global corporate executives, and meet with over 1,000 senior level executives from Chinese Growth companies, selected by ACG. At no extra cost, attendees can exhibit at the Capital Connection, CIPEF’s featured event. Please register soon.

DEALS

Warner Bros. Steps in as Midway Bidder
The media conglomerate emerges with a $33M bid at a time when content value has been shrunk.

Lime Rock Backstops Allis-Chalmers
The oilfield services company’s rights offering will sell 35.7 million common shares of the company’s common stock.

American Industrial Bids for Fleetwood Enterprises
Bankrupted RV-maker also dumps trailer plant to manufacturing company via court sale; bids can trump PE bidder until mid-June.

SumTotal Board OKs Latest Vista Bid
Vista’s break-up fee is now equivalent to the size of the one that would have been awarded to Accel-KKR.

USIS Acquired Labat-Anderson
Providence Equity Partners’ portfolio company bought the consulting and litigation support company for an undisclosed price.

J&J Makes Play for Cougar Biotech
The listed global pharmaceutical and retail company takes an oncology firm into its platform at a time when cancer treatment M&A has risen.

PEOPLE

Abelow Rejoins Houlihan Lokey
Justin Abelow left Deutsche Bank, returning to his middle-market roots.

Perella Weinberg Expands Restructuring Group
Richard Shinder and Agnes Tang jumped to the boutique from Goldman Sachs and Houlihan Lokey, respectively.

Versa Holds Final Close
Philadelphia-based “special situations” fund more than doubled its inaugural, 2006-vintage fund.

Barclays Names European M&A Co-Heads
Matthew Ponsonby and Mark Warham arrive from Citigroup and Morgan Stanley, respectively.

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