Capital Markets

Private Equity Shows Signs of Revival

A mini-flurry of developments indicates that buyouts are coming back and pending deals will go through.
Stephen TaubOctober 1, 2007

It looks like private equity is slowly coming back to life.

Sure, previously agreed-upon deals continue to fall apart. The latest occurred Monday when buyout firm Silver Lake Partners and hedge fund ValueAct Capital opted to terminate their merger agreement with Acxiom Corp. The announcement knocked down the shares of the data management company by more than 22 percent. Acxiom will receive a $65 million termination fee from the two investors.

However, late last week a number of developments suggested that prospects are improving for buyouts in general and the completion of pending deals.

For one, 3Com Corp., said it agreed to be sold to affiliates of private equity firm Bain Capital Partners LLC for $2.2 billion and taken private.

Second, KKR’s banks sold more than $9.4 billion in leveraged loans for the First Data deal, the biggest offering of high-yield loans since the credit crisis intensified in July, according to Bloomberg.

Third, CKX Inc. said it agreed to a revised takeover offer from 19X, a company led by chairman and CEO Robert F.X. Sillerman and “American Idol” creator Simon Fuller.

Finally, Avaya shareholders approved the $8.2 billion buyout by Silver Lake and TPG. The deal is now expected to close in October.