The accepted wisdom is that exits will drop off sharply for private equity firms this year because of the turmoil in the markets and declining valuations. But six deals since Friday suggest it may be easier to cash out than people have thought. To wit:
- London's Permira Advisers LLP struck a deal Monday to sell German phone services reseller Debitel AG to German telecom Freenet AG for €1.63 billion ($2.55 billion). Permira bought Debitel for just €640 million from Swisscom AG in 2004 and recouped its entire equity investment the next year through a dividend recap, according to financial reports of SVG Capital plc, a publicly traded investment fund that invests in Permira funds. SVG's filings indicate that its indirect stake in Debitel -- a proxy for Permira's position -- has appreciated 3.7 times, based on the Freenet deal. There are a couple of catches: Permira is being paid all in stock, which has a lock-up through next year. (It will become a 25% shareholder of Freenet.) And it is loaning Freenet €132.5 million to help pay for the acquisition. But it still looks like a sweet deal.
- Coated paper maker Verso Paper Corp., which Apollo Management LP bought from International Paper Co. in June 2006 for $1.4 billion, set a price range for its planned IPO April 25. Apollo already earned back almost all of its equity investment in a dividend recap. If the IPO prices at the midpoint of the projected range, the company will have an enterprise value of $2.1 billion, and Apollo will be looking at a 3 times, partially realized gain.
- Francisco Partners looks to more than double its $128 million equity investment in Metrologic Holdings Corp., flipping the bar code equipment maker to Honeywell International Inc. for $720 million less than a year and half after it teamed with Elliott Associates LP to take Metrologic private for $398 million. That deal was announced Monday.
Wednesday The Daily Deal reported on three more sales:
- Healthcare services outsourcing company MedAssets Inc. is buying Accuro Healthcare Solutions Inc. for $350 million from Welsh, Carson, Anderson and Stowe;
- United Online Inc. is buying FTD Group, the flower people, from Leonard Green & Partners for $800 millions; and
- Warburg Pincus is buying Safetykleen Europe from J.P. Morgan Partners LLC and CCMP Capital Advisors LLC £565 million ($1.1 billion).
Additionally, The Daily Deal will have the profits on the FTD and Accuro exits calculated by this afternoon. It's also worth noting that four of the five buyers in the sales are strategics. - John E. Morris
