SEE WHATS NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 98DIGEST100June 21, 2013123Google’s Acquisition Strategy May TapPE FirmsFamily Office Dealflow Hurdle;Investec SurveyEuropean PE Finds the IPO ExitCleantech Investment No Longer JustFor VCsGerman Publishing Deal Breaks 7 YearRecordQuote of the Week: Adding value
2www.DealMarket.com/digestGoogle’s Acquisition Strategy MayTap PE FirmsBloomberg reported that Google, which has been on the acquisition trail of late, is considering workingwith PE companies to improve its M&A process and structure its deals. Dan Primack in his Term Sheetblog questions the value of partnering with PE firms, pointing out that Yahoo boosted its M&A teamby putting industry insiders on the payroll. He argues Google doesn’t need the cash that PE partneringwould provide, and it can hire the acumen like Yahoo did if that’s what’s really necessary. The benefit ofis that Google would not dilute the risk/reward ratio, that is it would be more profitable to keep going italone.(Image Source: BloombergFamily Office Dealflow Hurdle;Investec SurveyThis week unquote has a review of Family Office andPE trends, discussing the results of an Investec survey.It quotes the survey author’s comment that the surveyraised a lot of questions in addition to revealing insightinto Family Office investment preferences. It says thatthe respondents desire to see more deals in the oil andgas sector and that they are “hugely optimistic” hopingto complete one to five deals this year in the face of alack of quality deals and fairly low dealflow. Most sur-veyed view fewer than 20 investment opportunities peryear. Investec said it all comes down to dealflow andwithout access to high quality deal origination, expertise and desire alone will not complete successfuldeals. Find the Investec survey report here.
3www.DealMarket.com/digestEuropean PE Finds the IPO ExitIt looks like PE-backed initial public offerings are returning after a long period when buyout firmsfaced skepticism from investors and in the meantime sought exits via sales to rivals, reports eFinan-cial News. The IPO wave was kicked off by the HellermannTyton floatation, a UK cable-tie companythat was backed by Doughty Hanson. It also says that BC Partners is expected to float Foxtons, theLondon estate agent. While these two are in the UK, the report suggests it’s a European trend too.Apparently, PE backed IPOs have been among the best-performing IPOs in the past two years. It is achange in sentiment, not necessarily a structural change in the market, according to the report.qual-ity deal origination, expertise and desire alone will not complete successful deals. Find the Investecsurvey report here.Time was when the only way to access clean energy investment was to become a venture capitalist oran LP in a VC fund. But that has changed dramatically in the past few years. “Today, there are ‘clean’investment opportunities available across all asset classes: fixed income, public equities and alter-natives.” It is this change that spurred Capital Dynamics to publish a lengthy ebook , along with PEI,about clean energy investment. It is a collection of essays by several clean energy experts who sharetheir views and expertise on the category. They look at the types of financing in use today, asset allo-cation strategies, the clean energy technologies and segments, the legal and regulatory environmentfor alternative energy investment and the role of private equity, as well as institutional investors in thevarious forms of financing. It is a useful resource for those interested in learning more about cleanenergy investment, particular those interested in a global approach.Cleantech Investment No LongerJust For VCs
4www.DealMarket.com/digestNew Trend: LPs Seek Local Manag-ers in Emerging Markets; PEIGerman Publishing Deal Breaks 7Year RecordThis week’s deal of the week is the buyout of a publishing company Springer Science+Business Me-dia by BC Partners. Reuters reports that the seller was another private equity group and the price isUSD 4.4 billion. It was the largest private-equity acquisition in Germany for seven years, said Reuters.In another article Reuters reported that it raised USD 2.5 billion to fund the deal, a sign of a changein deal financing trends. The WSJ has an article that discusses the return of cheap debt, offering a anumber of recent examples.Quote of the Week: ADDING VALUEOur experience has been that private equity buyouts provide the opportu-nity to incentivise and lead labour in much more efficient and innovativeways, rather than simply taking an axe to the workforce. The staggeringinefficiencies that are inherent in many companies today regardless ofsize and maturity, and the opportunity to point a company in a new direc-tion is where private equity really can add value.Who said it: Alex Barr is manager of the Aberdeen Private Equity FundIn Context: : In an editorial in the FT the rising stock market and its im-pact on PE is discussed. On the one hand, it improves the exit strategyfor investors as the IPO window opens and appetite for shares increases. It also enables higher valua-tions of portfolio companies on the books using data from comparable publicly traded companies. Onthe other hand, a rising stock market means it becomes more difficult to do take-privates because pric-es are higher. Barr writes in the second half points to other sources of dealflow for PE investors, mak-ing the case that a lot of value can be created by improving inefficiencies. He says that it is not the sameas job-slashing and says that PE’s reputation for that is unjustified. (Image source: fundweb.co.uk)Where we found it: Financial Times
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