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jerryking : buyouts   15

The spreadsheet maker who created Scotland’s flying unicorn
Mure Dickie in Edinburgh and Madhumita Murgia in London NOVEMBER 25, 2016.

Entrepreneur's belief pays off with GBP1.4 bn China buyout
travel  Scotland  small_business  mergers_&_acquisitions  M&A  software_developers  buyouts 
may 2018 by jerryking
Toys ‘R’ Us Case Is Test of Private Equity in Age of Amazon
MARCH 15, 2018 | The New York Times | By MICHAEL CORKERY.

The reality is that Toys “R” Us, which announced on Thursday that it would shutter or sell all of its stores in the United States, never had much chance at a turnaround.

For over a decade, Toys “R” Us had been drowning in $5 billion of debt, which its private equity backers had saddled it with. With debt payments siphoning off cash every year, Toys “R” Us could not properly invest in its worn-out suburban stores or outdated website. Sales plummeted, as Amazon captured more children’s desires — and their parents’ wallets — for Star Wars Legos and Paw Patrol recycling trucks.

Toys “R” Us is the latest failure of financial engineering, albeit one that could portend a potentially more ominous outlook for private equity in the digital era.....Most buyouts tend to work the same way. A private equity firm takes over a troubled company with the goal of sprucing up the strategy, cutting costs and overhauling the business over three or five years. But they often load up a company with debt to pay for the deal, which can prove problematic if the profits do not perk up.

In the age of Amazon, that formula can be dangerous. Consumer demands are changing so quickly that heavily indebted companies have trouble reordering their business to adapt and compete with better-funded rivals...... the deterioration of Toys “R” Us from a potential turnaround strategy to the end of an iconic brand — in a matter of months — shows just how difficult it can be for private equity to compete in a rapidly evolving industry. In retailing, Amazon is reordering everything on the store shelf. And children’s changing interest in games and toys, which now encompasses high-end electronics, adds to the complexity.....Enter Amazon. In recent years, the company had started to aggressively expand its toy business, creating a comprehensive, online showroom with low prices at the click of a button. Pressed by Amazon, Walmart also pushed hard into toys, dropping its prices to capture more market share.

Walmart could absorb the price cuts on toys because it makes up the profit on other items. But for Toys “R” Us, a price war on toys and games, its only offerings, was devastating.
private_equity  bankruptcies  toys  digital_economy  Amazon  Wal-Mart  KKR  Bain_Capital  Toys_"R"_Us  financial_engineering  LBOs  buyouts  shifting_tastes  category_killers  price_wars 
march 2018 by jerryking
With a Strategy Called Leveraged Buyouts, You Can Get a Company for 10% Down
July 1983 |Canadian Business | by Donald Hunter.

Increasingly, employees are executing leveraged buyouts of their companies. Such was the case when the managers of Doran's Northern Ontario Breweries Ltd. bought their company 6 years ago from Carling O'Keefe Ltd. to run it themselves. They raised C$1.5 million in share capital and borrowed CS3 million from banks. In a leveraged buyout. the buyers put up only a small part of the selling price; the rest is ñnanced with loans secured by company assets. Leveraged buyouts are also popular among professionals and entrepreneurs looking for investment opportunities that require a minimum of cash. Candidate companies favored by banks for leveraged buyouts have valuable assets. good management, steady earnings` and little or no debt. Before engaging in a leveraged buyout. as many costs as possible and seek outside help in structuring the deal. The benefits of leveraged buyouts are a chance for good returns and the satisfaction of running one's own business.
LBOs  employee-owned  employees  employee_ownership  leverage  buyouts 
january 2013 by jerryking
Animal spirits will stir buyout barons before CEOs
December 18, 2012
Print Print | ShareThis
Animal spirits will stir buyout barons before CEOs
By Jeffrey Goldfarb
CEOs  deal-making  private_equity  economic_dynamism  buyouts  idle_funds  cash_reserves 
december 2012 by jerryking
Private equity groups acknowledge the threat hedge fund are making into buyouts
Jun 6, 2005 | Financial Times pg. 10 | PAUL J DAVIES.

The extent to which hedge funds are competing directly for the kind of buy-out deals beloved of private equity firms is less certain. In 2004, hedge funds were successful in about 23 large US deals worth roughly Dollars 30bn (Pounds 16.6bn). This compares with Dollars 300bn in buy-out deals announced by private equity groups the same year.
while the hiring of private equity deal specialists by hedge funds has been on the rise, most still lack the know-how for the value creation that private equity has always aimed at. "Later on, PE firms are more likely to start launching hedge funds than the other way around because the PE firms have the deep teams, the investment specialists and deal expertise," says Mr [John Coyle]. "Hedge funds don't have these kind of resources."
Having a hedge fund arm would give PE firms ways to exploit the expensive due diligence they perform. PE firms examine many deals, but often end up outbid, or deciding that an opportunity is not a pure PE deal. At that point, all their work goes for nought, Mr Coyle says. "So, they see having a hedge fund that can invest in or finance the target in different ways as a way to leverage off all the due diligence they have performed."
private_equity  hedge_funds  Cerberus  Blackstone  KKR  Carlyle_Group  buyouts 
september 2012 by jerryking
Leveraged Buyouts
July 1983 | Canadian Business | by Donald Hunter
buyouts  leverage  financing  mergers_&_acquisitions  LBOs 
june 2012 by jerryking
Goldman Builds Ambitious Role In Buyout Realm - WSJ.com
October 31, 2006 | WSJ | By HENNY SENDER

Goldman Builds Ambitious Role In Buyout Realm
Loans to Private-Equity Firms Edge Out Commercial Bankers; Wearing Hat as Investors, Too

Investment banks are building their financing capabilities as they build their own buyout, or private-equity, businesses....Goldman's footprint has been especially deep on complicated deals like Texas Genco. The power company was bought by the four buyout firms -- Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. and Texas Pacific Group. When those private-equity firms won Texas Genco in a hotly contested auction, they counted on Goldman for several aspects of their offer.

In addition to arranging the loans, Goldman arranged derivatives transactions that protected the new owners against the possibility of a plunge in energy prices. This hedge gave comfort to other lenders, making the financing less costly than it would otherwise have been.

Similarly, in 2005, when Cerberus Capital Management LP bought paper and timber operations from MeadWestvaco for $2.3 billion, Goldman led the financing and arranged hedges for the new owners against fluctuations in the prices of pulp, natural gas and currencies.

"If a deal requires creativity, Goldman will figure out how to make it work," says Scott Sperling of private-equity firm Thomas H. Lee Partners LP in Boston.
buyouts  private_equity  Goldman_Sachs  funding  LBOs  Cerberus  investment_banking  creativity  derivatives  hedging  owners 
april 2012 by jerryking
Venture Capital's New Adventure - WSJ.com
December 21, 2006 | WSJ | By PUI-WING TAM.

Usual Role of Nurturing Start-Ups Takes On a Private-Equity Twist; Mr. Lanza Becomes a Deal Maker...."I suddenly became aware that we were triggering a rollup in the sector and my phone was ringing off the hook," says Mr. Lanza, 50 years old. "It was very surreal. I'm used to wandering the halls of Stanford to fund companies founded by two guys and a dog."

Like Mr. Lanza, other venture capitalists have broadened their roles beyond investing in and nurturing start-up businesses. They more often find themselves handling spinouts -- or buying units of publicly traded companies -- as well as so-called rollups and buyouts, and generally engaging in more-complex financial transactions.

In other words, they have stepped into the realm of private equity, now one of the finance world's hottest arenas. The change could make investing in venture-capital funds more risky.
venture_capital  vc  private_equity  Intel  deal-making  spin-offs  spinups  roll_ups  buyouts  Pui-Wing_Tam  carve_outs 
april 2012 by jerryking
Brew a good deal with the right ingredients
When buying a business, check to see whether you have the prerequisites, or risk wasting your time.

* Do you have the experience necessary?

* Do you have the combined skill set?

* Do you have the business contacts?

* Are you able to retain the key employees?

* Will you be able to keep the major customers of the business afterward?
brewing  deal-making  exits  buyouts  beers  ProQuest  buying_a_business 
march 2011 by jerryking
KKR Evolves, Hiring Trading Team From Goldman - WSJ.com
OCTOBER 21, 2010 | Wall Street Journal | By GREGORY
ZUCKERMAN Evolution at KKR: Goldman's Genetics, The move KKR. to hire a
team of stock traders from Goldman Sachs is a sign of change sweeping
the private-equity industry. Prestigious buyout firms are plunging into
stock & bond trading, underwriting, & hedge funds, and away from
the LBOs that earned them fame and fortune. As recently as 2004, $14.4
B of KKR's $15.1 B of assets came from leveraged buyouts. Today, after
diving into debt trading, only $41B of its $54.4 B portfolio is from LBO
investments. And KKR, whose stock now trades publicly as KKR & Co.,
is actively examining a push into other businesses, according to people
close to the matter....Top executives at KKR and other firms argue that
in their research on buyout deals they uncover other investing
opportunities, such possible debt and stock purchases, that they can't
profit from without operating other kinds of investment vehicles.
diversification  private_equity  KKR  markets  buyouts  market_research  leverage  stocks  carve_outs 
october 2010 by jerryking
Digital Possibilities Inspire B&N Chairman - WSJ.com
AUGUST 5, 2010 | Wall Street Journal | By JEFFREY A.
TRACHTENBERG. Digital Possibilities Inspire Riggio. Fresh Fervor for
Chain Spurs Barnes & Noble Chairman to Weigh Buyout Effort.
Barnes_&_Noble  buyouts  e-readers  digital_media  strategy 
august 2010 by jerryking

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