Here's the link to the article:
http://www.pionline.com/article/20130107/PRINTSUB/301079975/cheap-debt-means-private-equity-finally-pays-off#
Dividend Recapitalizations (also known as leveraged dividends) by private equity firms rose in 2012, according to an article today by Pensions&Investments. In "Cheap Debt Means Private Equity Finally Pays Off" the use of dividend recaps in the US by private equity firms in 2012 rose to 77 in number and $33.4 billion in amount, up from 55 in number and $17.7 billion in amount in 2011. Reasons for the increase included the availability of cheap debt, higher valuations of portfolio companies, uncertainty regarding the fiscal cliff and tax rate increases, and lenders having cleaner balance sheets.
Here's the link to the article: http://www.pionline.com/article/20130107/PRINTSUB/301079975/cheap-debt-means-private-equity-finally-pays-off#
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David Toll of peHUB has posted an article defending dividend recaps. Dividend recapitalizations are transactions in which a company backed by financial sponsors (typically through a leveraged buyout) borrow money to pay a dividend to its shareholders, which will typically include the financial sponsors and (commonly) management. The usual knock against dividend recaps is that they burden the company with too much debt and can lead to financial distress, layoffs and bankruptcy. In his article, Mr. Toll looks at dividend recaps from the perspectives of lenders, financial sponsors, management teams and portfolio companies and argues that dividend recaps are no worse than a typical leveraged buyout.
Here's a link to the article: http://www.pehub.com/140723/in-defense-of-greedy-parasitic-transactions/ |
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