In what otherwise has been a somewhat tepid year for private equity deals, we could see the year close out with a bang on just two high profile deals. Microsoft has officially thrown itself into the Yahoo fray, and KKR has managed to score one of the biggest leveraged buyout deals in a number of years with its $7.2 billion purchase of Samson Investment Company.
Source: http://www.fayerwayer.com
Microsoft Flexes its Yahoo Muscle
It has been no secret that Microsoft has been maneuvering to stay close, if not right on top of the Yahoo saga which has turned into a story with no definitive ending. For months Yahoo has been dangling itself out to private equity firms in the hopes of securing the financing it needs to restructure its faltering balance sheet and live to see another day. Although the potential $10 billion deal has attracted the attention of several major players, such as Bain Capital , KKR, Blackstone, Silver Lake Partners and TPG Capital, but a major hitch has prevented anyone firm from stepping up to the plate. Yahoo has insisted that prospective bidders sign a nondisclosure agreement which, essentially, would prevent any “crosstalk” between bidders.
Microsoft, which has a stake in Yahoo by virtue of its existing advertising relationship, has been working in the shadows to forge possible financing partnerships with some of the private equity firms. Although the nondisclosure agreement would prevent it from talking shop with them on any deal specifics, it seems that it has already forged a consortium that could lead to a deal in the near future. While details of a deal structure are not available, it is assumed that Microsoft would be good for several billion dollars.
With Microsoft on board, we will likely see more of the private bidders ink the nondisclosure so they can begin their positioning as minority investors.
KKR Goes Big With Samson Investment Acquisition
KKR has managed to pull off the deal of the year with its lead role in a $7.2 billion leveraged buyout of Samson Investment Company. Samson is one of the largest privately owned energy companies in the U.S., and its acquisition looks to boost KKR’s position in the energy field and places them smack in the middle of the burgeoning natural gas industry. The deal tops the ealrier buyout of Kinetic Partners by Apax Partners which was valued at $5.7 billion. KKR also boasts a $5.3 billion deal in 2010 which was its acquisition of Del Monte Foods.
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