Paramount Owner Draws Buyout Interest

Paramount Owner Draws Buyout Interest

Private equity news the week of January 29th, 2024.

Insights

Chart of the Week: Private equity exits in North America fell -41% in 2023, as buyers and sellers remain in a stalemate over valuations. The average deal size of a PE-backed exit in North America last year was $500 million, more than double the average deal size in Western Europe. Dive into more private equity exit trends from our latest report. (Read More)

More Insights

  • Private Equity Exits Report 2024 (Read More)
  • Private Equity is Recruiting More Public Company Execs (Read More)
  • Private Equity Operating Trends Report 2024 (Read More)
  • Turnaround Case Study: Dell Technologies (Read More)
  • The 100 Largest Private Equity Buyouts of All-Time (Read More)

Deal News

David Ellison, founder of Skydance Media and son of Larry Ellison, is in talks to acquire National Amusements, which owns a controlling stake in Paramount, from the Redstone family. The deal would be financed by KKR and RedBird Capital Partners. Meanwhile, Apollo Global Management is also reportedly weighing a bid for the company. (Source)

After Macy’s rejected a $5.8 billion takeover bid, Arkhouse Management Managing Partner Gavriel Kahane told CNBC “we’re certainly not done.” The buyout firm is partnering with Brigade Capital Management to try to unlock value in Macy’s real estate assets, but the retailer’s board scoffed at the offer citing too low a valuation and the buyers’ lack of experience managing companies. Sycamore Partners is also reportedly considering an offer. (Source)

Carlyle Group is reportedly interested in selling technology services company HSO for around $1 billion. The European company has over 1,200 clients and specializes in integrating Microsoft cloud computing solutions. (Source)

Bridgepoint has acquired beauty brand Roc Skincare for $500 million from Gryphon Investors. The company was founded in 1957 and specializes in retinol-based products. Bridgepoint’s Fabrice Turcq says the buyout firm will help Roc invest in its online business and expand its product offering. (Source)

Industry News

The New York Times profiles KKR’s profit sharing model with portfolio company employees. The concept is simple: incentivize employees to create more value than the shareholders give up in equity. In one particularly successful example, KKR paid out an average of $175,000 to more than 800 employees when it sold CHI Overhead Doors for $3 billion in 2022. The article spotlights a non-profit called Ownership Works, which is working to implement this model at scale across PE-owned companies. (Source)

Warburg Pincus CEO Chip Kaye gave an interview to Chief Executive magazine wherein he shares the number one topic his team is counseling portfolio company CEOs on: “One is on the pricing side. The other is everybody’s going through zero-based budgeting, fuel for growth, whatever you want to call it, but the reassessment of, ‘the world shifted on me, and I now need to go back and look at cost structure’ and decide what growth investments I really am prepared to make and what I’m not so that I am most focused on cash that gives me the ability to control my own destiny.” (Source)

Alan Kestenbaum, the CEO of Canadian steelmaker Stelco Holdings, is launching a $400 million fund with his own money to invest in industrial assets that have fallen out of favor during the energy transition, such as coal. (Source)

Bloomberg reports that private equity firms are recruiting quants away from hedge funds and other data-heavy parts of financial services. Avi Turetsky, who is head of quantitative research at Ares Management, says more LPs are asking fund managers to distinguish their returns from the general direction of markets. (Source)

Semafor makes the case for why private equity has gone from “Wall Street’s disruptors to its establishment,” and why the industry’s move into private credit is a sign that there are too many funds.  “We don’t think of private equity as being a mature industry but it is. They’re the incumbents, and have all the pressures and incentives that come with that,” says Daniel Lavon-Krein, a partner at Kirkland & Ellis. (Source)

Operating News

Kevin Rubin has been named CEO of Alteryx, which was acquired recently by Clearlake Capital and Insight Partners. Rubin currently serves as the company’s CFO. It’s a rare example of buyout firms replacing a CEO with an internal candidate. Only 24% of PE-backed CEOs are internal hires, according to a recent Value Add research report. (Source)

Paul Strasser has joined Attain Capital as an Operating Partner. Previously, he was CEO of IT services company Brillient Corporation. (Source)

Tim Marino has been hired as an Operating Partner at Globitas. He has a consulting background, and spent 10+ years at Strategy& and PwC. (Source)

Questions? Email us: editor@valueaddpe.com