Update: 1/30/2013 - Advent International's majority acquisition of AOT Bedding Super Holdings was for a consideration of $2.7 billion, making it the 7th largest Private Equity acquisition of 2012. The deal was not including in the official release, and the table below has been updated accordingly. As a result, Onex's acquisition of USI Insurance does not make the Top 10 ranking anymore.
January 23, 2013 2:00 am EST - 2012 has come to a close, so it's time for PrivCo to release our annual rankings of the Top 10 Largest Private-Equity (P.E.) Deals of the Year.
Noticeable with this year's PrivCo Top 10 P.E. Deals rankings: the preponderance of secondary sales (that is, sponsor-to-sponsor deals, where private-equity firms sell the company to new private-equity buyers rather than strategic buyers), as well as the number of spinoff acquisitions: divestitures of large units of giant conglomerates by selling them to private-equity buyers. "Last year's Top 10 Largest Private-Equity Deals made it clear that multi-billion-dollar P.E. deals, as well as leverage, are back," said PrivCo Founder & CEO Sam Hamadeh in a statement (leveraged buyouts, the use of large amounts of debt to buy companies, lets private equity firms buy larger companies than they could if they had to pay with only cash and magnify their returns on investment when the company is sold). Topping the list in 2012: the $7.2 billion acquisition of EP Energy Corporation, the oil and gas exploration and production unit of El Paso Corp., by Apollo Global Management, LLC, Riverstone Holdings LLC, Access Industries, and Korea National Oil Corporation.
The Most Active Private-Equity Firms Among 2012's Top 10 Largest P.E. Deals: CARLYLE GROUP And APOLLO GLOBAL MANAGEMENT
The Top Deal Advisors Among 2012's Top 10 Largest P.E. Deals: THE GOLDMAN SACHS GROUP And WEIL, GOTSHAL & MANGES LLP
PrivCo reveals 2012's Top 10 Largest Private-Equity Deals Of The Year:
Top 10 Private Equity Acquisitions Of 2012:
- $7.2 Billion - EP ENERGY CORP. Acquired By P.E. Buyers: Apollo Global, Riverstone Holdings, Access Industries, Korea National Oil Corporation
- $6.6 Billion - CEQUEL COMMUNICATIONS Acquired By P.E. Buyers: BC Partners, Canada Pension Plan Investment Board
- $4.9 Billion - DUPONT PERFORMANCE COATINGS Acquired By P.E. Buyer: Carlyle Group
- $3.7 Billion - FOCUS MEDIA Acquired By Carlyle Group, Fountainvest Partners, China Everbright, CITIC Capital, Jason Nanchun Jiang
- $3.5 Billion - HAMILTON SUNDSTRAND INDUSTRIAL Acquired By Carlyle Group, BC Partners
- $3.3 Billion - GETTY IMAGES Acquired By Carlyle Group, Getty Images management, the Getty Family
- $3.2 Billion - TRANSUNION Acquired By Goldman Sachs Capital Partners, Advent International
- $2.7 Billion - AOT BEDDING SUPER HOLDINGS Acquired by Advent International
- $2.7 Billion - PARTY CITY Acquired By Thomas H. Lee Partners
- $2.5 Billion - MCGRAW-HILL EDUCATION Acquired By Apollo Global
- $2.3 Billion - USI INSURANCE Acquired By Onex Corporation
Note: PrivCo data only includes acquisitions made by private equity groups with headquarters in North America.
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Top 10 Private Equity Acquisitions Of 2012 (In Depth Analysis):
#1. EP Energy Corporation: $7.2 Billion
- Purchase Price: $7.15 billion
- Equity: $2.65 billion
- Debt: $4.50 billion
- Debt/Equity Ratio: 1.7
- Date: Feb. 2012
- Buyers: Apollo Global Management, LLC, Riverstone Holdings LLC, Access Industries, Korea National Oil Corporation
- Seller: El Paso Corp.
- Buyside Financial Advisors: Citigroup, Inc.; Credit Suisse Group AG; Deutsche Bank AG; J.P. Morgan; RBC Capital Markets
- Buyside Legal Advisors: Paul, Weiss, Rifkind, Wharton & Garrison LLP; Tudor, Pickering, Holt & Co., LLC; Vinson & Elkins LLP; Willkie Farr & Gallagher LLP; Debevoise & Plimpton
- Sellside Financial Advisors: Barclays plc
- Sellside Legal Advisors: Locke Lord Bissell & Liddell LLP
- EP Energy Corporation Headquarters: Houston, Texas
- EP Energy Corporation Business/Revenue Model: EP Energy Corporation is an oil exploration and production business.
- Investment Rationale: EP Energy Corporation's assets are attractive because of their acreage in the Niobrara field in Colorado and the Eagle Ford and Wolfcamp fields in Texas, which produce profitable oil and natural gas liquids such as propane and butane. Josh Harris, Senior Managing Director at Apollo Global Management, said, “Apollo is acquiring a company with an impressive portfolio of valuable natural resource assets, a talented management team and a remarkable group of highly skilled employees."
- Deal Notes: This acquisition is parallel to Kinder Morgan's $21 billion purchase of El Paso Corp. Shortly after the El Paso Corp. acquisition was announced, Kinder Morgan revealed plans to sell the company's exploration and production business (later renamed EP Energy Corporation).
For EP Energy Corporation Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on EP Energy Corporation
#2. Cequel Communications Holdings, LLC: $6.6 Billion
- Purchase Price: $6.58 billion
- Equity: $1.98 billion
- Debt: $0.50 billion
- Debt/Equity Ratio: 0.25
- Date: Nov. 2012
- Buyers: BC Partners Ltd., Canada Pension Plan Investment Board, Cequel Communications Holdings management
- Seller: Goldman Sachs Capital Partners, Quadrangle Group, LLC, Oaktree Capital Management, L.P., Jordan Company, Charterhouse Group, Inc., Cequel III, LLC
- Buyside Financial Advisors: Credit Suisse Group AG
- Buyside Legal Advisors: Latham & Watkins LLP; Torys LLP; Wachtell, Lipton, Rosen & Katz
- Sellside Financial Advisors: LionTree Advisors, LLC; The Goldman Sachs Group, Inc.
- Sellside Legal Advisors: Paul Hastings LLP; Seyfarth Shaw LLP; Fried Frank Harris Shriver & Jacobson LLP
- Cequel Communications Headquarters: St. Louis, Missouri
- Cequel Communications Business/Revenue Model: Cequel Communications Holdings, LLC (d.b.a. Suddenlink) is a cable broadband services provider in the U.S.
- Investment Rationale: BC Partners has experience in the industry, having invested in other cable broadband companies like Com Hem AB (Sweden) and Unitymedia GmbH (Germany). Moreover, Cequel's standing as a top 10 broadband provider in the U.S. makes it an attractive investment - purchase price was 8.6 times Cequel's first quarter 2012 annualized EBITDA, well above public market multiples. "Cable is an industry we know well in both Europe and the United States, and epitomizes the defensive growth characteristics we typically seek in an investment," said BC Partners Co-Chairman and Managing Partner Raymond Svider.
- Deal Notes: Cequel's prior investors made over 210% gain on their initial investments.
For Cequel Communications Holdings, LLC Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on Cequel Communications Holdings, LLC
#3. DuPont Performance Coatings: $4.9 Billion
- Purchase Price: $4.90 billion
- Equity: $4.90 billion (all-cash deal financed by two of Carlyle’s funds, Carlyle Partners V and Carlyle Europe Partners III)
- Debt: N.A.
- Date: Aug. 2012
- Buyers: Carlyle Group
- Seller: E. I. du Pont de Nemours and Company (d.b.a. DuPont)
- Sellside Financial Advisors: Credit Suisse Group AG
- DuPont Performance Coatings Headquarters: Wilmington, Delaware
- DuPont Performance Coatings Business/Revenue Model: DuPont Performance Coatings is a maker of automotive paints and related products.
- Investment Rationale: Carlyle Group has made other investments in the industrial and transportation markets, including Allison Transmission, Hertz Global Holdings and Hamilton Sundstrand (also #6 on this list). Carlyle Group is attracted to the DuPont Performance Coatings' technology, brands, and business in developing markets like China and Brazil. Greg Ledford, Carlyle Group Managing Director and Head of the Industrial and Transportation team, said, “DuPont Performance Coatings is a successful business with attractive market positions, next-generation technology and established brands. Through targeted investments we will support DPC’s product development and growth objectives as it transitions to a stand-alone company."
For DuPont Performance Coatings Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on DuPont Performance Coatings
#4. Focus Media Holding Ltd.: $3.7 Billion
- Purchase Price: $3.70 billion
- Equity: $2.17 billion
- Debt: $1.53 billion
- Debt/Equity Ratio: 0.70
- Date: Dec. 2012
- Buyers: Carlyle Group, Fountainvest Partners Co. Ltd., China Everbright International Ltd., CITIC Capital China Partners, L.P., Jason Nanchun Jiang (CEO)
- Seller: 3i Group Plc
- Buyside Financial Advisors: Citigroup, Inc.; Credit Suisse Group AG, Deutsche Bank AG; ICBC International; Merrill Lynch; UBS Investment Bank
- Buyside Legal Advisors: Clifford Chance LLP; Conyers Dill & Pearman; Fangda Partners; Fried Frank Harris Shriver & Jacobson LLP; Skadden, Arps, Slate, Meagher & Flom LLP; Sullivan & Cromwell LLP; Zhong Lun Law Firm
- Sellside Financial Advisors: J.P. Morgan
- Sellside Legal Advisors: Fangda Partners; Kirkland & Ellis LLP; Maples and Calder; Shearman & Sterling LLP; Simpson Thacher & Bartlett LLP
- Focus Media Holding Headquarters: Shanghai, China
- Focus Media Holding Business/Revenue Model: Focus Media Holding Ltd. is an advertising company offering advertising distribution and outdoor advertising services.
- Investment Rationale: Focus Media Holding operates one of the largest outdoor advertising networks in China and operates one of the country's largest Internet advertising agencies. Foreign backed LBOs are rare in China, famous for its capital controls and restrictive regulations. This acquisition presents Carlyle Group with greater exposure to the Chinese advertising market.
- Deal Notes: This acquisition is the largest ever private equity deal in China.
For Focus Media Holding Ltd. Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on Focus Media Holding Ltd.
#5. Hamilton Sundstrand Industrial: $3.5 Billion
- Purchase Price: $3.46 billion
- Equity: $1.04 billion
- Debt: $2.42 billion (estimated at 70% of purchase price)
- Debt/Equity Ratio: 2.3
- Date: Jul. 2012
- Buyers: Carlyle Group, BC Partners Ltd.
- Seller: United Technologies Corporation
- Buyside Financial Advisors: Citigroup, Inc.; RBC Capital Markets
- Buyside Legal Advisors: Latham & Watkins LLP
- Sellside Legal Advisors: Linklaters LLP
- Hamilton Sundstrand Industrial Headquarters: Windsor Locks, Connecticut
- Hamilton Sundstrand Industrial Business/Revenue Model: Hamilton Sundstrand Industrial manufactures and supports aerospace and industrial products.
- Investment Rationale: Hamilton Sundstrand Industrial has steady growth, low capital expenditure requirements, good cash flow performance, and high margins. For Carlyle Group and BC Partners, Hamilton Sundstrand Industrial represents a great platform which can be expanded via acquisitions. Vipul Amin, Principal of The Carlyle Group, said, “We believe Hamilton Sundstrand Industrial’s strong product mix combined with secular growth trends in the energy, chemicals and industrials sectors create attractive long-term growth prospects for the company.”
- Deal Notes: United Technologies Corporation is selling Hamilton Sundstrand Industrial to raise cash for financing its Goodrich Corp. acquisition.
For Hamilton Sundstrand Industrial Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on Hamilton Sundstrand Industrial
#6. Getty Images, Inc.: $3.3 Billion
- Purchase Price: $3.30 billion (for majority stake)
- Date: Aug. 2012
- Buyers: Carlyle Group, Getty Images management, the Getty Family
- Seller: Hellman & Friedman LLC
- Buyside Financial Advisors: Allen & Company
- Buyside Legal Advisors: Debevoise & Plimpton; Davis Polk & Wardwell LLP
- Sellside Financial Advisors: J.P. Morgan; The Goldman Sachs Group, Inc.
- Sellside Legal Advisors: Simpson Thacher & Bartlett LLP; Weil, Gotshal & Manges LLP
- Getty Images, Inc. Headquarters: Seattle, Washington
- Getty Images, Inc. Business/Revenue Model: Getty Images, Inc. is a creator and distributor of stock photography, videos, and multimedia products.
- Investment Rationale: Getty Images, Inc. has a significant collection of digital assets as well as product and client diversification. Moreover, Getty Images, Inc. is currently riding the trend of media digitization that is evolving on a global basis. Carlyle Group looks to continue the expansion of Getty Images, Inc.' global footprint, where the digitization curve is not advanced as North America or Europe. Eliot Merrill, Managing Director of The Carlyle Group, said, “Getty Images, Inc. is the premier, digital global marketplace for commercial visual content. We look forward to partnering with Mark Getty, Jonathan Klein and the talented Getty Images management team. We will harness Carlyle Group's financial resources and global network to help take Getty Images, Inc. to the next stage of product innovation and global growth.”
- Deal Notes: Hellman & Friedman LLC made over 130% on its investment.
For Getty Images, Inc. Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on Getty Images, Inc.
#7. TransUnion LLC: $3.2 Billion
- Purchase Price: $3.19 billion
- Equity: $0.95 billion
- Debt: $2.25 billion
- Debt/Equity Ratio: 2.4
- Date: Feb. 2012
- Buyers: Goldman Sachs Capital Partners, Advent International Corp.
- Seller: Madison Dearborn Partners, Inc., Pritzker Group
- Buyside Financial Advisors: Evercore Partners Inc.; The Goldman Sachs Group, Inc.
- Buyside Legal Advisors: Davis Polk & Wardwell LLP; Simpson Thacher & Bartlett LLP; Weil, Gotshal & Manges LLP
- Sellside Financial Advisors: Deutsche Bank AG; Merrill Lynch
- Sellside Legal Advisors: Latham & Watkins LLP
- TransUnion LLC Headquarters: Chicago, Illinois
- TransUnion LLC Business/Revenue Model: TransUnion LLC provides credit data and financial services.
- Investment Rationale: TransUnion LLC is the third largest provider of credit information to banks and consumers. TransUnion LLC benefits from the global conversion from cash to credit cards, with high growth potential in expansion markets. Goldman Sachs Capital Partners and Advent International will look to expand in Latin America and other geographical locations. "TransUnion LLC is a high-quality organization with market-leading product offerings and a strong management team," said Sumit Rajpal, a managing director at Goldman Sachs Capital Partners.
- Deal Notes: The acquisition includes the assumption of over $1.6 billion of debt. Also, Madison Dearborn doubled its investment in TransUnion LLC.
For TransUnion LLC Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on TransUnion LLC
#8. AOT Bedding Super Holding: $2.7 Billion
- Purchase Price:$2.7 Billion
- Equity:$760 Million
- Debt:$1,958 Billion
- Date: August 2012
- Buyers: Advent International Corporation
- Seller: Ares Management, Ontario Teachers Pension Plan
- Target Financial Advisors: Barclays PLC, Deutsche Bank AG, Morgan Stanley
- Target Legal Advisor: Sullivan & Cromwell LLP
- Buyside Financial Advisor: Weil, Gotshal & Manges LLP
#9. Party City Holdings: $2.7 Billion
- Purchase Price: $2.69 billion (for majority stake)
- Equity: $0.58 billion
- Debt: $1.85 billion
- Debt/Equity Ratio: 3.2
- Date: Jun. 2012
- Buyers: Thomas H. Lee Partners
- Seller: Advent International Corp., Berkshire Partners LLC, Weston Presidio Capital
- Buyside Financial Advisors: Merrill Lynch; Moelis & Company LLC
- Buyside Legal Advisors: Weil, Gotshal & Manges LLP
- Sellside Financial Advisors: Deutsche Bank AG; The Goldman Sachs Group, Inc.
- Sellside Legal Advisors: Ropes & Gray LLP
- Party City Holdings Headquarters: Elmsford, New York
- Party City Holdings Business/Revenue Model: Party City Holdings designs, manufactures and distributes party good and accessories.
- Investment Rationale: “Party City leads the $10 billion retail party goods industry in terms of product selection and retail network. We look forward to working closely with the team at Party City to maximize its scale and vertically integrated business model to continue to grow its business,” said Todd M. Abbrecht, a managing director at Thomas H. Lee Partners. Thomas H. Lee Partners will try to maximize Party City's scale and provide the company with liquidity for growth (Party City had filed for an IPO prior to this acquisition, in an attempt to raise funds).
- Deal Notes: Several of Party City Holdings’s existing investors, including Advent International Corp., Berkshire Partners LLC and Weston Presidio, will retain minority stakes.
For Party City Holdings Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on Party City Holdings
#10. McGraw-Hill Education, Inc.: $2.5 Billion
- Purchase Price: $2.50 billion
- Date: Nov. 2012
- Buyers: Apollo Global Management, LLC
- Seller: McGraw-Hill Companies, Inc.
- Buyside Financial Advisors: BMO Capital Markets; Credit Suisse Group AG; UBS Investment Bank
- Buyside Legal Advisors: Morgan, Lewis & Bockius LLP; Paul, Weiss, Rifkind, Wharton & Garrison LLP
- Sellside Financial Advisors: Evercore Partners Inc.; The Goldman Sachs Group, Inc.
- Sellside Legal Advisors: Clifford Chance LLP; Wachtell, Lipton, Rosen & Katz
- McGraw-Hill Education, Inc. Headquarters: New York, New York
- McGraw-Hill Education, Inc. Business/Revenue Model: McGraw-Hill Education, Inc. is an academic publisher of educational materials.
- Investment Rationale: McGraw-Hill Education, Inc. is the second largest educational publisher in the world and offers a very diversified and global business model. Currently, the educational publishing market is undergoing a shift from textbooks to digital media packages. Apollo Global Management, LLC has a history of investments in education, and looks to adapt McGraw-Hill Education, Inc.'s content for digital delivery. Larry Berg , Senior Partner of Apollo said, "We look forward to leveraging the company's leading portfolio of trusted brands and innovative digital learning solutions to drive growth through the ongoing convergence of education and technology on a global basis."
- Deal Notes: McGraw-Hill will take a $450 million to $550 million impairment charge in the fourth quarter to mark down the value of the unit (McGraw-Hill expected a price of around $3 billion for the unit).
For McGraw-Hill Education, Inc. Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on McGraw-Hill Education, Inc.
#11. USI Insurance Services, LLC: $2.3 Billion
- Purchase Price: $2.30 billion
- Equity: $0.70 billion
- Debt: $1.60 billion
- Debt/Equity Ratio: 2.3
- Date: Nov. 2012
- Buyers: Onex Corporation, USI employees
- Seller: Goldman Sachs Capital Partners
- Buyside Financial Advisors: Bank of America Corporation; Citigroup, Inc.; Morgan Stanley; RBC Capital Markets; The Goldman Sachs Group, Inc.; UBS Investment Bank
- Buyside Legal Advisors: Kaye Scholer LLP
- Sellside Financial Advisors: RBC Capital Markets; The Goldman Sachs Group, Inc.
- Sellside Legal Advisors: Weil, Gotshal & Manges LLP
- USI Insurance Services, LLC Headquarters: Briarcliff Manor, New York
- USI Insurance Services, LLC Business/Revenue Model: USI Insurance Services, LLC provides property and casualty insurance, retirement consulting, and employee benefits.
- Investment Rationale: USI Insurance Services, LLC is one of the top 10 largest insurance brokers in the U.S. Insurance brokers over the past few quarters have seen strong revenue growth and positive cash flow performance, as a result of increased prices due to economic losses. Onex Corp. will look to grow the company via acquisitions.
For USI Insurance Services, LLC Revenues, Financials, M&A Deals & More, Read PrivCo's Private Company Financial Report on USI Insurance Services, LLC
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