Would Another Private Equity Firm Make A Go At EMI?
February 7, 2011 at 4:16 AM (PT)
As the music and financial worlds attempt to figure out the future of EMI, JOSH KOSMAN in THE NEW YORK POST writes it isn't easy out there for private equity firms looking to make a go of taking over large companies.
"As CITIGROUP starts to market EMI," writes KOSMAN, "and private-equity firms, including KKR, begin to kick the tires of the embattled music label, there is some cold and sobering news for HENRY KRAVIS' firm and the other PE giants thinking of buying the company: nine of the 10 biggest global leveraged buyouts of media companies completed from 2005 through 2009 are losers, statistics show."
A pension adviser who invests in private-equity firms told THE POST, "You need a good healthy economy to do well with these businesses. I think private-equity firms need to understand that media is cyclical."
PE Investments In Clear Channel And Univision Are Down
Beyond TERRA FIRMA's problems with EMI, the report uses both CLEAR CHANNEL COMMUNICATIONS and UNIVISION as examples of how tough it can be for private equity firms buying into media.
"I think everyone who bought UNIVISION [MADISON DEARBORN, PROVIDENCE EQUITY, THL PARTNERS and TPG CAPITAL] will tell you off the record that they overpaid," another source told THE POST. "No one anticipated the drop in auto advertising."
"PE firms in CLEAR CHANNEL as of SEPTEMBER 30th valued their investment at about 75 cents on the dollar. At UNIVISION, the picture was worse, according to investors in the fund that bought that company: 60 cents."