Breakingviews

Ultimate Fighting punches up value of live sports

May 11, 2016

The U.S. promotion firm is reportedly seeking up to $4 bln for its mixed martial arts contests, with China’s Dalian Wanda viewed as a likely buyer. That seems high for a relative upstart in the world of pro athletics. But huge audiences for real-time events may justify the price.

Cox: The social costs of financial returns

By Rob Cox
March 24, 2016

That’s the tension at the center of “Dry Powder,” an off-Broadway play about private equity. Like most dramatizations of high finance, it engages in caricature. But the show also offers genuine insight into the emerging risks Wall Street faces from rising income inequality.

Apollo’s $7 bln ADT deal comes with extra security

February 16, 2016

It’s an alarming buyout given the state of credit markets. The LBO firm and co-investors, though, are kicking in a big slug of equity to keep debt at a relatively safe level. Merging ADT with another Apollo-owned company should add cost savings and help lock up a decent return.

Cox: Scope out the bank in U.S. retail camouflage

By Rob Cox
February 16, 2016

The business model of Cabela’s, which is up for sale, resembles a $3.2 bln chain of taxidermy museums issuing unsecured debt to assault-rifle buyers. Most of the profit at the “World’s Foremost Outfitter” comes from a loan book ballooning in ways that should give suitors pause.

Activist + private equity = no M&A for Symantec

February 5, 2016

The internet security group netted $5.3 bln from selling Veritas. Pressured by Elliott, it’s now borrowing $500 mln from Silver Lake and returning all the cash to investors rather than keeping a war chest. Symantec’s questionable dealmaking record makes the straitjacket merited.

How Symantec let bad math lead to a shaky deal

January 21, 2016

Carlyle’s buyout of the software company’s Veritas unit was never actually worth the $8 bln headline figure. Excessive leverage was dressed up to make it look workable. Even the new 8 pct price cut is misleading. Boards and investors can help themselves by getting M&A sums right.

Fund glut will send Asia’s buyout barons off-piste

December 30, 2015

Local private equity firms are flush with unspent capital. Though that’s a global issue, it’s more acute in Asia due to a dearth of sizeable takeover targets. Firms will be tempted to overpay for assets, buy businesses from rivals, or drift into unfamiliar kinds of dealmaking.

Avon colors new activist-buyout battle lines

December 4, 2015

The makeup company is under fire from a pushy investor and may call on private equity firm Cerberus to help. Motorola and NCR similarly just sold minority stakes to Silver Lake and Blackstone. This growing white-knight role suggests the targets aren’t the only ones with troubles.

Yahoo sale would carry a warning from print

December 3, 2015

The internet company may be putting itself on the block. Private equity is interested – and perhaps in L.A. Times parent Tribune, too. Both are plagued by a long-term decline in advertising revenue. LBO shops fell victim to that disease with newspapers a decade ago.

CVC gives wake-up call to old-style asset managers

December 2, 2015

The private equity house is buying half of UK breakdown service RAC from Carlyle at a valuation of 2.2 billion euros. In some ways it’s a bog-standard secondary buyout. But it also sees private equity invading the turf of public market investment institutions.