|
Published December 17, 2007 at 9:23 AM
|
When the credit markets froze over the summer, the fate of scores of leveraged acquisitions was thrown into doubt. Arbitrage spreads shot out, and the M&A world watched nervously as the closing dates of key deals approached to see whether deals would be completed, and lenders would be able to syndicate the debt they had promised to provide.
Continue reading below
By early December, many had closed on time on the original terms, but other collapsed or were recut. Moreover, even where transactions closed and shareholders collected, in many cases lenders have been left with much of the debt stuck on their books. Here's a tally of the some of the deals we've been following closely since September. — John E. Morris
Target |
Acquirer |
Value ($mill.) |
Status |
| Accredited Home Lenders Holding Co. |
Lone Star Funds |
$400 |
The price on this deal at the epicenter of the subprime mortgage meltdown was cut 22%. It closed Oct. 12. |
| Alliance Data Systems Corp. |
Blackstone |
7,800 |
FDIC approval should come soon. Debt-marketing period could begin in Jan. 3 unless Blackstone waives that right and closes faster. |
| Alltel Corp. |
TPG, Goldman Sachs Capital Partners |
27,500 |
Closed Nov. 16, but banks retain some debt on their books. |
| Avaya Inc. |
Silver Lake, TPG |
8,300 |
Closed Oct. 26, but banks still hold all the debt on their books. |
| Baush & Lomb Inc. |
Warburg Pincus |
4,500 |
Closed on Oct. 26. All the debt was syndicated in October. |
| BCE Inc. |
Teachers, KKR, et al. |
51,300 |
Awaiting regulatory approvals; apparently on course. |
| Catalina Marketing Corp. |
Hellman & Friedman |
1,700 |
Closed Oct. 1. Covenant-lite debt offering was oversubscribed and sold at a small discount. |
| CDW Corp. |
Madison Dearborn, Providence Equity |
7,300 |
Closed Oct. 12. |
| Ceridian Corp. |
TH Lee, Fidelity National Financial Inc. |
5,300 |
LBO with stategic partner closed Nov. 9. Banks still hold $2 bill. of term loan. |
| Clear Channel Communications |
Bain, TH Lee Partners |
22,000 |
FCC approval of LBO is near. Side deal to sell TV stations to Providence Equity Partners for $1.2 bill. is collapsing but does not seem to threaten main buyout. Company plans to extend termination date to June 12 but expects to close in Q1 2008. |
| Cumulus Media Inc. |
Merrill Lynch Global Private Equity |
1,300 |
Company projects early 2008 close but stock trades 30% under buyout price on anxiety about debt markets and impact of slowing economy on radio ads. |
| First Data Corp. |
KKR |
29,000 |
Seen as major test of debt markets, buyout closed Sept. 24, but bonds sold at 94 cents and banks still hold some of the debt. |
| Guitar Center Inc. |
Bain |
2,200 |
Closed Oct. 9 despite fears that retail and debt market weakness might kill the deal. |
| Harman International |
KKR, Goldman |
8,000 |
Deal scrubbed Oct. 22. KKR and Goldman made $400 mill. PIPE investment instead. |
| Harrah's Entertainment |
Apollo, TPG |
28,400 |
Waiting on state regulatory approvals, which are expected early in 2008. |
| Hilton Hotels |
Blackstone |
26,300 |
Closed Oct. 24. |
| Manor Care |
Carlyle |
6,600 |
Union activists have caused delays in state regulatory approvals. |
| Myers Industries Inc. |
GS Capital Partners |
790 |
Debt sale has been pushed off twice: In effect, Goldman now has an option to buy until April 30, with no penalty if it pulls out. |
| Nuveen Investments Inc. |
Madison Dearborn, Wachovia, Merrill Lynch, Deutsch |
6,500 |
Closed Nov. 13. Debt priced near par and was oversubscribed. |
| PHH Corp. |
GE Capital Corp., Blackstone |
9,800 |
GE's deal hinges on secondary sale of assets to Blackstone, but lenders for that want to cut debt package. |
| SLM Corp. |
JC Flowers, J.P. Morgan, BofA, Freidman Fleischer |
25,000 |
Buyers claim a MAC, but would be interested at lower price. Now in Delaware Court of Chancery. |
| Tribune Co. |
Sam Zell-led ESOP |
8,200 |
Company will use cash to cut bridge loan from $2.1 bill. to $1.6 bill. It is challenging condition of FCC approval that would limit ownership of papers and TV stations in same markets, but expects to close by year end. |
| TXU Corp. |
KKR, TPG |
44,100 |
Closed Oct. 10, with $37 bill. of debt sold, including toggle PIKs. Showed that prime credits could still be financed. |
| United Rentals Inc. |
Cerberus |
6,600 |
Buyer pulled out, claiming no liability beyond $100 mill. break fee. Parties are in court in Delaware and New York. |
Source: The Deal |
Comments
|
A couple of comments on the chart -
1) BCE - the PE buyer is Providence Equity, not KKR. KKR was in a rival consortium.
2) SLM - from press I've seen, the Flowers-led group has decided not to purchase the company at a lower price and litigation is moving forward.