Skip to: Content
Skip to: Site Navigation
Skip to: Search

September 5, 2008 2:57:42 AM CDT

Learn about Newser Points »

« Back to the grid | Next story »

Hot LBO Market Takes Hit

Posted Jun 8, 07 9:40 AM CDT in Business 

(Newser) – The red-hot market for LBOs may be hitting a long-awaited rough patch. Several big deals—including Apollo's $1.3 billion Linens 'n Things buy and the multigroup $17.6 billion acquisition of Freescale Semiconductor Holdings—have turned sour, with the companies struggling to generate enough cash to pay down debt after soft quarters.

Industrywide, the interest-coverage ratio for newly private companies—their ability to pay interest on their debts—is at a 10-year low. And if the economy slows further, or companies hit cyclical downturns, they may find themselves struggling to meet their debt obligations at all. But some analysts think bears are crying wolf. "These are one-off problems," says a Bear Stearns exec of the small set of troubled deals.

Source Wall Street Journal

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Tishman, Lehman Close REIT Deal

    May 29, 07 11:50 AM CDT
    Tishman, Lehman Close REIT Deal In a penthouse-level play, real estate developer Tishman Speyer Properties and investment bank Lehman Brothers will spend $13.5 billion to buy the nation's second-largest apartment owner. The $60.75 per share offer for real estate trust Archstone-Smith, confirmed this morning, will take the company private in a deal worth over $22 billion including debt. More »

  • Blackstone Makes $7.8B Deal for Alliance

    May 17, 07 2:55 PM CDT
    Blackstone Makes $7.8B Deal for Alliance Blackstone has snapped up credit card services provider Alliance Data for $7.8 billion, joining a surge of private equity into dull but profitable back-office firms. The 30% above-market offer for Alliance, which also runs a data processing unit, is the latest in a wave of takeovers in the financial-processing sector that started with KKR's April bid for First Data. More »

Trojan Piggy Bank   ((c) AndWat)
Piggy Bank   ((c) babasteve)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

More on leveraged buyouts

Threads (1 of 1)

Tags

US economy  • business  • acquisitions  • merger  • debt  • privatization  • takeovers  • LBOs  • leveraged buyouts  • Avista Capital Partners


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular


Other Home Stories

What is Newser?

2008 Codie Finalist

Newser gives you more news in less time. We search for the best and most important stories all over the web, read them for you, and deliver concise and sharp summaries—along with links to the full text. Newser provides a way to stay on top of an ever-expanding horizon of news and opinion—politics, sports, business, trends, technology, personalities, crimes, and controversies. Newser keeps you not just better informed, but, with our signature graphic interface and smart condensed format, more enjoyably informed.

Learn more »