Market wrap up: Delphi emergence spurs deal activity

Deal volume got a major boost during the past two weeks, aided by Delphi Corp.’s emergence from Chapter 11 bankruptcy protection.

Delphi, the automotive parts maker that was spun off by General Motors, emerged from a four-year stay in bankruptcy protection. The company, which cut thousands of workers and divested several business assets, agreed to sell its steering systems operations and four plants back to GM for the reorganization.

The company’s emergence from bankruptcy was executed through a sale of most of its assets to a new holding company called Delphi Holdings, which is led by senior creditors Elliott Management Corp. and Silver Point Capital. The deal is valued at about $10.98 billion, including more than $6.6 billion in assumed liabilities.

Thomson Reuters (publisher of PE Week) tracked five leveraged buyouts from Oct. 6 to Oct. 13. Only two disclosed financial terms, but a majority of the deal value is from the reorganization that led to Delphi’s emergence from Chapter 11 after four years under bankruptcy protection.

The reorganization and the period’s other deals had an aggregate value of $11.01 billion. This more than doubled year-to-date deal volume to $22.13 billion from $10.96 billion.

Fund-raising review

Fund-raising activities of the period included a final closings and the start of new investment vehicles. Menlo Park, Calif.-based GI Partners also closed GI Partners Fund III with more than $1.9 billion in capital commitments.

In addition, Atlas Holdings started marketing its first traditional buyout fund. It is seeking to raise $300 million for Atlas Holdings I with the help of Capstone Partners, which agreed to serve as placement agent. Greenwich, Conn.-based Atlas Holdings invests in distressed companies in the lower middle market.

So far in 2009, buyout and mezzanine firms have secured $51.9 billion in capital commitments. —Eamon Beltran