Market at a Glance: Buyout funds continue to pile up cash, Clear Channel perks up slow deal pace

Fund-raising by U.S. buyout shops is thriving, but judging from the slow deal pace, much of that money is simply being stockpiled.

Over the past two weeks, U.S. buyout and mezzanine firms have raised $7.1 billion, with $2.6 billion getting raised last week. The year-to-date fund-raising total now sits at $160.4 billion.

Last week’s fund-raising highlight was Quantum Energy Management. The Houston-based firm lined up $920 million for its fifth fund, Quantum Energy Partners V LP, which has a target of up to $2.75 billion, according to a regulatory filing. Champlain Advisors is serving as the fund’s placement agent. Quantum, founded in 1998, primarily focuses on the oil and gas sector with a secondary emphasis on the midstream, oil-field service, coal, power, and alternative energy sectors, according to its website.

In other fund-raising news, LLR Partners Inc. closed its third fund above its $600 million target. The Philadelphia-based firm collected $800 million in capital commitments for LLR Equity Partners III LP.

Founded in 1999, LLR describes itself as one of the Mid-Atlantic’s most active private equity firms. It focuses on the middle market, with equity investments ranging from $10 million to $75 million. Its third fund will invest in a variety of industries, but will have an emphasis on business services, health care, financial services and information technology.

Music to the ears of Bain and THL

On the deal front, activity remained slow until Bain Capital Partners and Thomas H. Lee Partners LP acquired Clear Channel Communications Inc. (NYSE: CCU). Thomson Reuters (publisher of PE Week) tracked just nine LBO transactions during the past week. For the two-week period, there have been 22 LBO transactions sponsored by U.S. firms. Year-to-date deal volume climbed up to about $90.4 billion last week from $64.3 billion a week earlier.

The highlight of the week was the long-awaited buyout of radio station and billboard kingpin Clear Channel by Bain and THL for $25.9 billion, including liabilities assumption. The deal was originally announced in November 2006 and didn’t get done until a lower share price was negotiated in May.

Gemcom Software International Inc. (TSX:GCM) was the next largest transaction. Carlyle Group LLC, JMI Equity Partners and Pala Investments Holdings Ltd. bought the Canadian developer of technical mining software for 190 million Canadian dollars ($150.4 million).

The Gemcom deal was originally announced in May, with Carlyle and JMI agreeing to pay 2.90 Canadian dollars per share of Gemcom. After Pala, Gemcom’s largest shareholder, balked at that price, Carlyle and JMI upped the price to 3.05 Canadian dollars per share, and Pala agreed to participate in the take-private transaction.

Another notable buyout that closed in the past week was the acquisition of Stolle Machinery Co. LLC by Blackstone Group’s GSO Capital Partners LP unit. Centennial, Colo.-based Stolle is a provider of equipment, aftermarket parts and services used in the production of beverage and food cans. It was previously owned by mid-market buyout shop Littlejohn & Co. —Eamon Beltran and additional reporting by PE Week staff