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 Evidently no good deed goes unpunished -- at least for private equity firm TPG Capital. The LBO firm is limping away from its investment in Midwest Air Group Inc. after watching the value of the portfolio company crash to earth over the past two years. Republic Airways Holdings Inc. (NASDAQ:RJET) scooped up Milwaukee-based Midwest from TPG at the bargain basement price of $6 million in cash plus a $25 million note that may be converted into Republic Airway's stock at $10 a share. (Subscribers can see The Deal Pipeline story here.) While TPG was able to notch an exit, the deal returns only a fraction of the $450 million a consortium including the buyout shop and Northwest Airlines Corp. paid for the troubled airline in August 2007. (Subscribers can see The Deal Pipeline story here.) At the time the take-private rescued the small airline from the hostile overtures of rival AirTran Holdings Inc. (NYSE:AAI), who had bid $290 million for the regional flier. Although TPG is one of the more profitable private equity firms in history, some of its biggest headaches have come when it rides to the rescue. For example, the firm saw its entire investment in Washington Mutual wiped out last year only months after it led a consortium that put $7 billion into the thrift to boost its capital base, which was being ravaged by rising delinquencies and defaults stemming from its massive subprime mortgage lending portfolio. - George White See The Deal Pipeline story on Midwest sale (subscription only) See The Deal Pipeline story on TPG purchase of Midwest (subscription only) See Dealscape post: Financial Crisis winners and losers
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