With continued activity throughout the year, numbers dropped – as did enthusiasm – but business kept on
With the value of many companies remaining depressed due to the continuing economic downturn, the time may seem ripe for speculative companies to make buyout bids in the expectation of boosting their value in order to realise a healthy profit. However, hedge fund and private equity firms have been facing many of the same problems as those encountered by all companies, that is to say reduced confidence in the markets, leading to a reduced willingness to provide funds for investment. However, there have still been several notable large hedge fund buyouts in the past year. In fact 2011 has been one of the most high value post-Lehman era buyout years so far. Here are five of the top hedge fund deals of the past 12 months.
In the third quarter of the year, Kinetic Corps Inc. was acquired by Apax Partners, CPP Investment Board and the Public Sector Pension Investment Board. This was a public to private buyout, which means Kinetic Corps Inc. is now being run as a private company – at least until its value has been raised enough to make it worthwhile going public again. The company was bought at an agreed price of $6.3bn, making it the largest buyout deal in the third quarter of 2011. Kinetic Corps Inc. is a healthcare firm located in the US.
Pharmaceutical Product Development, PPD, was sold in a private equity backed deal for $3.9bn. Carlyle, along with Hellman & Friedman, announced their intentions of proceeding with the buyout in the early part of October. PPDs shares had been bottoming out, plunging from a high of $33.25, three years before, down to just over half that, $16.97. This deal comes third in the rankings of biggest buyouts for 2011 and was backed with debt financing by Credit Suisse, Goldman Sachs, UBS and JP Morgan.
The largest equity buyout of 2011, which also included restructuring costs, was a $9.4bn deal to acquire the assets of Centro Properties Group. The deal is particularly interesting to those in the financial sector, because it marks a further step closer to the magical $10bn+ buyout, which many view as a mark of economic potential and health. In fact, this buyout is the largest since the financial collapse of 2008. Centro Properties is a very large US based operator of malls; the company runs nearly 600 across the USA.
In the eurozone, there have also been some significant buyouts. Securitas Direct was bought for $3.44bn by Bain Capital and Hellman & Friedman in Q4 of 2011 and ranks as the fourth largest buyout of the year. SPIE SA is another eurozone company that was bought out earlier in the year, in May, with a purchase price of $3bn. HSBC Holdings, Morgan Stanley and Societe Generale SA provided financing for the deal.