Tuesday, March 06, 2007

where are the "exits" ? / private equity

this example illustrates what has make me wonder for a while now. numerous private equity funds have bought several companies from other private equity firms and are now merging the operations to a new company owned 100% from private equity ( in this case all this happened in 2-3 years). they call it "develop the new company", you need "scale", "geographic diversification" etc......is this really always the motivation?

where is the real exit, where are the ipo´s or the sales to "strategic" partners that are consolidating their businesses?

dieses beispiel beschreibt eine frage die mich schon länger beschäftigt. diverse private equity firmen kaufen verscheidenen firmen von anderen pe firmen und fusionieren nun mit einem anderen pe zu einem neuen firma die erneut zu 100% pe gehört. in diesem fall alles binnen 2-3 jahren. begründet wird das mit der "weiterentwicklung des unternehmens, größenvorteile, geografische diversifikation etc.... aber ist das zwangläufig die motivation?

wo bleiben die wirklichen ausstiege, die börsengänge oder die verkäufe an die natürlichen strategischen partner in den einzelnen branchen?

the longer theses exits are delayed the more you can get the feeling that they are often flipping their stakes because nobody else wants these "valuable" (and highly debtloaded) assets (at this price...).

maybe it is because they get free debt so there is no need to exit......including refinancing within month....http://immobilienblasen.blogspot.com/2007/02/lbo-madness-refinancing-within-month.html
on the other hand not everbody can "create" exits like fortess .......... http://immobilienblasen.blogspot.com/2007/03/plundered-fortress-pump-and-dump-at-its.html

i would like to see a detailed number of the following graph where you can see which percentage is tied to a real exit and which represents the flipping from one pe to another. this would be interesting.

je länger diese ausstiege auf sich warten lassen desto mehr kann man als kritischer betrachter das gefühhl bekommen das hier beteiligungen nur geflippt werden und anscheinend niemand diese "wertvollen" (und hochverschuldeten!) assets (zumindest nicht zum gewünschten preise) haben will. evtl. ist aber auch der zwang zum aussteig nicht gegeben weil pe die gelder momentan hinterhergeschmissen bekommen (s.link 1 oben). ausserdem bekommt nicht jeder den ausstieg so gut wie fortress zurecht.......(link 2)

ich würde zugerne wissen wie sich die in der grafik aufgeführten nummern zusammensetzen. welcher prozentsatz der deals bezieht sich nur auf pe zu pe und welcher zeigt den wahren anteil der "echten" abschlüsse?

make sure you read this piece / das sollte man ebenfalls gelesen haben

"should you buy when private equity sells ? "


Blackstone Buys Tussauds Group for 1 Billion Pounds
March 5 (Bloomberg) -- Blackstone Group LP agreed to buy Tussauds Group, owner of London's Madame Tussauds waxworks museum, for 1 billion pounds ($1.9 billion) to create the world's second-biggest operator of tourist attractions.

Blackstone's Merlin Entertainments Group will acquire Tussauds from Dubai International Capital LLC, a government- backed buyout firm that acquired the waxworks two years ago, the company said in a statement today. Dubai will receive a 20 percent stake in the combined business.

The takeover combines Blackstone's London Dungeon and Legoland theme parks with Tussauds' waxworks and London Eye ferris wheel to create the world's biggest theme park operator by visitor numbers after Walt Disney Co., owner of Disneyland. Tussauds draws 14 million visitors a year to its sites.

London Eye, Legoland
Dubai is selling two years after it bought Tussauds for 800 million pounds from London-based buyout firm Charterhouse Capital Partners LLP. In November 2005, the fund bought control of the British Airways London Eye, Britain's most-popular paying tourist attraction. .....

The two companies still plan an initial public offering ``at some point'' Varney said. ``It's part of a long-term aspiration,'' he said.

Goldman Sachs Group Inc. advised Blackstone, while Lehman Brothers Holdings Inc. and UBS AG advised Merlin. Citigroup Inc. advised Dubai International Capital and Tussauds.

Smaller Deals
New York-based Blackstone set a record last month with its $39 billion takeover of real estate developer Equity Office Properties, the biggest-ever buyout.

LBO firms in Europe are struggling to pull off deals the same size as those in the U.S. as investors reject offers more frequently. The biggest buyout in the region remains the $15.3 billion takeover of Danish phone company TDC A/S in November 2005 by a group including Blackstone. In Britain, money managers have rebuffed approaches for companies from record producer EMI Group Plc to broadcaster ITV Plc, holding out for higher offers.

As a result, the buyout firm is also pursuing smaller targets in Europe, which it can expand through takeovers before selling the enlarged business. .....

London Dungeon
``Our preference is always to do larger deals,'' Blackstone Senior Managing Director Joseph Baratta said in a telephone interview. ``But the universe of large deals in Europe is smaller than in the U.S.''

Blackstone bought Merlin for 102.5 million pounds in May 2005, giving it control of the London dungeon as well as the Sea Life and Earth Explorer amusement parks.

Three months later, it bought Lego A/S's Legoland theme parks for 375 million euros ($492 million), beating a rival offer from Dubai International. In October last year, the company added Gardaland, Italy's biggest theme-park operator.

``The business has now bought scale,'' Baratta said. ``There probably won't be significant large acquisitions'' after today's takeover.

Before Merlin, the U.S. buyout firm had invested in amusement parks for more than a decade, including a stake in the Six Flags theme park group it sold at a profit after two years in 1993. In 2000, it bought Rank Group Plc's 50 percent stake in Universal Studios Escape, owner of Universal Studios Florida and Islands of Adventure.

``It's an industry that during times of wars, recessions and depressions and other economic turndowns doesn't see the depth of the decline that other industries feel,''....

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Anonymous ilanit said...

In September I would have speculated that MS would not be treating a first-tier Orange Country business investment like Blackstone this way. But as the Fall has progressed and the potential liability increased it is clear that banks are willing to risk even their largest clients to wriggle away from some of these deals.

4:49 AM  

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