News briefs, June 18, 2007

Alinda builds $3B

Late last week, after PE Week went to press, Alinda Capital Partners was expected to announce that it has closed its debut fund with $3 billion in capital commitments. Alinda is part of the new wave of infrastructure-focused private equity funds, and was launched last year by Chris Beale, former global head of project finance at Citigroup.

Alinda went to market with a $1 billion target, but agreed to set a $3 billion hard cap earlier this year. Dane Vene, a principal with fund placement agent C.P. Eaton, says that the plan was to raise the first $1 billion on Beale’s track record, and then return to market in a year or two. But he says that oversubscription came quickly, to the point where many LPs were cut back 20% or more. He adds that few institutional investors have dedicated infrastructure buckets, but rather that Alinda would sometimes meet with PE specialists, sometimes with real estate specialists and sometimes with fixed income specialists. And sometimes with all of them.

Biomet bites at increased offer

Biomet Inc. (Nasdaq: BMET) has accepted an increased buyout offer from a private equity consortium made up of The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG. The revised agreement raises the payout from $44 per share to $46 per share, for a revised equity value of $11.4 billion.

Institutional Shareholder Services had advised stockholders to reject the original offer, while the consortium says that its new offer represents “the absolute limit” of upward flexibility. In the meantime, Biomet has postponed its special shareholder meeting and said that, per the revised merger agreement, it will not pay its annual dividend.

Where are the buyout IPOs?

VC-backed IPOs are off and running in 2007, but what of buyout-backed IPOs? There has been a surprising lack of buyout-backed IPOs in 2007, as just 15 have gone out so far in 2007, according to Thomson Financial (publisher of PE Week), compared to 66 in 2006. Is it a statistical anomaly that will soon correct itself? Or is it a prolonged slowdown?

Buyout-backed IPOs have accounted for just 15.15% of all U.S. IPO pricings so far in 2007. This compares to a 50% mark for the first half of 2006, and a 46.47% mark for the entire year.