Hellman & Friedman are getting much deserved attention for the DoubleClick investment and subsequent sale to Google. Yet, this firm is hardly a one trick pony. With offices in New York, London and San Francisco, H&F has been in business since 1984, and has made investments across a broad swath of industries. Although their technology investments have been notable of late, they have a broad portfolio.
Firsthand experience with H&F's acumen: A few years ago, I was an investor in Texas Genco [all the credit goes to my partner on this one], which was acquired by a consortium of private equity heavyweights [including H&F] for $900mm. Although that represented an attractive premium to the share price, many of us felt the company was worth far more thanks to deregulation of the Texas electric utilities. The following year, the consortium sold Texas Genco for $5.8 billion. Almost $5b in profits in a year's time; making the return we public equity shareholders received seem far less satisfying.
Other recent momentum:
- A few weeks ago, H&F acquired Kronos (KRON) for $1.8 billion ($55 per share)
- Today, Catalina Marketing (POS) agreed to be acquired by H&F for $1.7 billion ($32.50 per share) which trumps a prior unsolicited bid by ValueAct Capital
They say that good things come in threes, well H&F might want to amend that to "good things come in fours" because the also announced the closing of an $8.4 billion fund today. This fund, its sixth, doubles the firms managed assets and will focus on investments ranging from $250mm to $1 billion.
With exits like DoubleClick and Texas Genco; it's no surprise H&F was able to raise such a large new fund. To anyone who thinks we've reached the peak of the current private equity M&A binge; look at the fund flows. There are massive war chests waiting to be deployed; it's not over by a long shot.
Note: This is not a
recommendation to buy or sell GOOG, KRON, POS or any other security, but is merely a
personal analysis to foster discussion for informational purposes only.
At the time of this writing, I and/or funds I maintain discretionary
control over did not
maintain a position (long or short) in GOOG, KRON or POS . We also may, at times, carry derivative options on underlying
positions as a hedge.
hellman & friedman doubleclick private equity m&a texas genco catalina marketing kronos investing woodrow enterprise+irregulars