The co-founder of the Carlyle Group, the giant District private-equity firm that invests tens of billions of dollars on behalf of pension funds and other investors, said over the weekend that he expects most of the major firms in his industry to become public companies in the next few years.
"These guys who built these private-equity firms: You can say many things about them, but one thing you can't say is they're stupid, or they are not an alpha male," said David M. Rubenstein, Carlyle's managing director. "These guys are going to be fairly forthright about getting what they think they earned for building these firms."
Posts filed under Finance
More on Double-Click and Hellman & Friedman
More detailed financials from WSJ Deal Journal on the economics for Hellman and Friedman.
UPDATE: Turns out we were a little light in calculating Hellman's take on this deal. The firm, along with a few other investors, put in about $330 million of equity to purchase the company. Adding in $435 million from the previous sale of the business that used to be called Abacus, that brings the total to around $3.5 billion. There's even a word for this kind of return: A killing.
So we are talking (very roughly) about something in the range of a 8x return in a year and half (once the debt was paid off) and $500M in carry for the GP. Very impressive.
Of course the big loser is this is not Microsoft but the sellers of Double-Click in 2005, who left a few billion dollars on the table...
DoubleClick, Google, Microsoft, Hellman & Friedman
Google snatches away DoubleClick from Microsoft. At this price, it is a defensive move to keep Microsoft from getting a greater foothold in online advertising (we originally saw prices of $2B or so bandied around), but kudos to Hellman and Friedman who bought the compay for $1.1B in 2005 when it was not obviously underpriced. Very impressive on their part. The sale was for 10x revenue (!)
Google reached an agreement Friday to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year.
Brief blurb at Dealbook.
Update:
More analysis from Paul Kedrosky .
How much worse can things get for Microsoft? After having almost certainly begun the DoubleClick bidding, thus putting the online ad company in play, Microsoft has seemingly been outbid -- again -- by Google.
Some seemingly think the price is vertigo-inducing, working out to something like 30-times DoubleClick's $100-million in 2006 ad placement revenues, or 12-times this year's forecast ad revenues of $230m or so. Yoicks! Can you justify that price based on economics? Some people will try, and that is always good fun; others will go on endlessly about the bubble-ish price. Both sides are wasting their time because the more interesting rationale is mostly elsewhere.
To borrow a phrase from Microsoft's past, this is a brazen attempt to cut off Microsoft's future air supply. The latter company is losing share in search, failing at ad placement, trying to find a new leg to growth, and generally floundering expensively in these crucial new fast-growing markets. What better way and time for bid-'em-up Brin to stick the knife in deeper every time Microsoft spots a possible life raft than for Google to buy the target acquisition company -- like DoubleClick -- out from under Microsoft.
Dow Fires Executives
Wow, you don't see that every day... two senior Dow Chemical folks fired for unauthorized buyout talks, supposedly with Middle Eastern investors, KKR and others. Hope KKR gives them a nice reference for their next job.
Three days after it insisted it wasn't up for sale, Dow Chemical has fired two executives it claims held unauthorized talks to sell the company. In a press release, Dow said Pedro Reinhard, a board member, and Romeo Kreinberg, an executive vice president, had engaged in business activity that was highly inappropriate and a violation of the company's ethics code.
The company said action was swift: After knocking down buyout rumors on Monday, the company learned about the unauthorized discussions on Tuesday. The board was notified Wednesday, and the two men were fired Thursday morning.