Breakingviews

Acquirers can expect more M&A investor skeptics

December 22, 2014

There’s no reason to think the $3.2 trln pace of deals will slow in 2015, but the uproarious reception from shareholders is already showing signs of subsiding. As easy pickings of squeezing costs from overlapping operations evaporate, the laws of corporate finance will prevail.

Dry powder may explode in buyout barons’ faces

December 18, 2014

Everything is going up in private equity except deal volume. Acquisition multiples are at a record high, as is competition from corporate buyers. For big firms such as Apollo and Blackstone, $1.5 trln of purchasing power may be tough to deploy without cratering returns.

Private equity shows signs of pre-crisis brio

November 25, 2014

Canada’s Onex has bought Swiss packager SIG for up to $4.7 bln in a secondary buyout. It’s one of Europe’s biggest LBOs in five years and deploys pre-crisis levels of leverage. Private equity restlessness and a shortage of big targets created the conditions for a landmark deal.

Carlyle buys a shovel-maker for deal gold rush

November 5, 2014

The private equity firm is teaming up with publisher Euromoney for a $700 mln buyout of Dealogic, the financial data provider. With IPOs, debt issuance and M&A soaring, the acquisition will be a 2014 test of an old adage: in most booms it pays to sell the necessary tools.

Spreadsheet bungles alive and well in high finance

October 20, 2014

No less a practitioner than Goldman Sachs double-counted some of Tibco Software’s shares in calculating the company’s value in a sale worth $4.3 bln – oops, sorry, $4.2 bln. The mistake probably didn’t change much. What’s telling is that no one spotted a fairly obvious blunder.

Blackstone sale may kick off next deal trend

October 10, 2014

Spinning off its advisory arm marks an end to the buyout firm’s beginning. Merging it with ex-Morgan Stanley banker Paul Taubman’s shop potentially heralds the start of something else. The rise in global M&A could spawn a super-boutique or entice a big bank to buy an indie firm.

Henry Kravis spins a different kind of club deal

September 16, 2014

The buyout baron’s KKR is buying Pioneer’s DJ audio equipment business for $550 mln. It’s Abenomics meets Ibiza for the private equity firm’s latest trendy investment. Kravis is laying down a smooth groove in a funky M&A market, but could be late to the dance music party.

Hedge-fund-free – the latest Californian fad?

September 16, 2014

Calpers, the $300 bln pension manager, is offloading its $4 bln of hedge funds. Too many in the 2-and-20 crowd look like stock pickers yet still present liquidity risks and, lately, low returns. Endowments are different, but for retirement funds Calpers could be setting a trend.

Aussie privatisation push makes for buyer’s market

September 8, 2014

State governments are being encouraged to sell off infrastructure assets. The estimated value of the pipeline is equal to almost three-quarters of the total M&A activity in the country over the past two years. A lack of coordination could leave laggards with lousy valuations.

Square swipes a hollow-looking $6 bln valuation

August 29, 2014

That’s what the payments company may be worth after its latest fundraising. It’s big, but a deflated figure, considering Square’s former hype, the small amount raised, and tech rivals’ ease securing higher valuations. Blame increasing competition for Square’s comparative malaise.