The new issue of The Deal has a very private equity-ish feel, with a theological spin. Our cover story, “The Temptations of Private Equity,” features a penetrating examination by Vyvyan Tenorio and David Carey into exactly what’s going on in that very hot market, particularly with leverage and coverage ratios. Their highly sophisticated analysis continues our always strong PE coverage and picks up where Carey’s “Not Your Father’s LBO” left off in October, as we wrestle to understand this evolving industry that continues to dominate deal markets and elicit often-contradictory reactions from the general business media. That, in fact, is exactly where Yvette Kantrow in her Media Maneuvers column, “Lessons of Lucifer,” heads this week. Kantrow contrasts BusinessWeek, which insists buyouts are an almost criminal enterprise, and Fortune, which has decided that LBOs are not only next to godliness, but a lesson for all public companies, shareholders be damned. Hard to align those points of view. She also revisits the promiscuos blogging going on at Business 2.0. Tenorio and Carey also touch on the story of Eve, the serpent and the apple in their “Temptations” story, which gives me, in the Transactions column, license to riff broadly on the role of leverage in dealmaking.
Elsewhere in the issue, David Marcus tackles the six-company slugfest over Canadian mining companies Falconbridge and Inco in “Heavy Metal.” Both companies were eventually acquired, but, as Marcus points out, the deals really erupted as they did because of steadily rising commodity prices shaking up a normally staid business. And over in the bankruptcy beat, Alexandrs Rozens looks at the results of third quarter bankruptcy league tables in “Roll Over Beethoven,” and discovers that U.S. firms, caught in a very quiet market, have begun to look overseas for growth. Who knew Germany was going to be such a bankruptcy hotbed?—Robert Teitelman
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