Filed under: The Blackstone Group, The Carlyle Group, Private equity industry

About a year ago, the rage in private equity was the so-called megabuyout. It seemed like no company was immune. There was even speak of $100 billion dollar deals.

Of course, the credit crunch ended the megabuyout. In fact, it ended most of the activity for private equity folks.

Yet, according to the co-founder of the Carlyle Group, David Rubenstein, things are perking up [subscription required]. His firm - like other veterans, such as The Blackstone Group (NYSE: BX) - comprehends market cycles. After all, these players have dealt with variety of credit crunches, such as in 1991-1992, 1998 and 2001-2002.

Rubenstein predicts we’ll see a pick-up in deals over the next few months. Even though, the deals are prone to range from $2 billion to $4 billion, with less debt. And expect more foreign deals.

Funny enough, Rubenstein seems to be leading the charge with its recently announced a $2.54 billion deal for a majority stake in Booz Allen Hamilton.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Raising money, Texas Pacific Group, Private equity industry, Investments, Value and lack thereof

A new capital raise may have set a record, or at least close to it. Tygris Commercial Finance Group, Inc. has launched a new commercial finance company for middle markets transactions, and it says in the launch release that its funding is over $1.75 billion in equity commitments. Tygris says this is the largest initial capital raise ever in the U.S. commercial finance sector. Tygris will initially have offices in Chicago, Stamford, CT and Parsippany, NJ.

Tygris was founded by Aquiline Capital Partners LLC (”Aquiline”), a New York based private equity firm specializing in financial services, with New Mountain Capital, L.L.C. and TPG Capital joining as lead investors.

The company also claims to have established significant relationships with financial institutions including Deutsche Bank, Credit Suisse, SunTrust Robinson Humphrey, Barclays, Wachovia and Wells Fargo Foothill. With the backers and management team here on this, this seems like it is easily within the realm of contacts.

The Company initially will concentrate on developing leading franchise positions in three commercial finance businesses: middle market corporate finance, middle market equipment leasing and asset finance, and small ticket leasing.

Below is the management team, and unless I’m missing something it looks like an impressive list of executives:

• Frederick E. “Rick” Wolfert, former Vice Chairman of Commercial Finance of the CIT Group and President of Heller Financial Inc., is the Company’s CEO.
• Steven F. Kluger, EVP, Capital Markets and Corporate Strategy; former President/CEO of GE Capital Markets.
• Stuart A. Armstrong, President of Corporate Finance; former President/CEO of Black Diamond Commercial Finance, former Senior Managing Director and Head of Corporate Lending’s vertical industry financing groups at GE Commercial Finance.
• Laird M. Boulden, President of Asset Finance (Chicago); former President/CEO of RBS Asset Finance, and President/co-founder of the Commercial Equipment Finance Group for Heller Financial Inc.
• Tim J. Eichenlaub, EVP, Chief Risk Officer; former Senior Managing Director and Group Head for CIT’s Sponsor Finance business.
• T. Doug Hollowell, EVP, General Counsel and Head of Depository Strategy; former Executive Director at Morgan Stanley Corporate Treasury, and General Counsel at Merrill Lynch Capital.

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Filed under: The Blackstone Group, Private equity industry

The struggles of the big boys in private equity have been well chronicled: Blackstone Group’s (NYSE: BX) declining stock price, the Linens n’ Things bankruptcy, and so on.

But NexCen Brands (NASDAQ: NEXC), a smaller, less diversified buyout shop, is also in trouble, according to The New York Times. The firm’s portfolio companies include Bill Blass, Athlete’s Foot and ice cream chain MaggieMoo’s. With other brands including Pretzel Time and Great American Cookies, the fast-growing company had planned to make millions in the franchising business. But in recent months NexCen has fired its CFO, delayed the filing of its 10-Q, disclosed that there is “substantial doubt” about its ability to continue as a going concern, and announced that investors should no longer rely upon its 2007 financials.

Basically, NexCen is looking like yet another failed conglomerate, at least for now. Rather than buying, improving, and selling businesses like many private equity firms, NexCen had hoped to acquire various franchise brands and run them under a larger umbrella, taking advantage of synergies and opportunities for integration. Yes, that’s the dreaded S-word. I wonder how many billions of dollars in shareholder value have been destroyed by promises of synergy.

With the company badly in need of cash, it’s currently looking to sell some or all of its brands. But in this market, that might not be so easy. Athlete’s Foot and Pretzel Time sure didn’t create a lot of value for NexCen shareholders.

More bad news for Blackstone:

• Both GAAP and “economic net losses” in the latest financial results from Blackstone

• Lawsuits filed against Blackstone on behalf of shareholders

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