Spring 2018
Akash Pulluru
THE IMPACT OF TAX REFORM ON THE PE INDUSTRY

On December 19th, a Republican-controlled Congress narrowly passed a tax reform bill. This bill represents the most significant tax overhaul since 1986 and has profound implications for the private equity industry. Although this administration is often chastised for being overly friendly to private equity barons, the reality of this bill is far more complicated.

Healthcare

HUMANA AND PE SHOPS PROVIDE LIFE SUPPORT FOR KINDRED HEALTHCARE

Back in December of 2017, Kindred Healthcare announced that it would be bought out by Humana, TPG Capital, and Welsh, Carson, Anderson & Stowe after months of acquisition talks. Facing a huge debt load (949.61 D/E ratio), challenging industry conditions, and uncertainty regarding federal support for Medicare and Medicaid (big sources of revenue for Kindred Healthcare), the company at one point had courted half a dozen private equity firms before agreeing to a deal with the consortium.

ADVENT INTERNATIONAL MAKES OFFER FOR STADA

As of February 23rd, Boston-based Advent International Corporation has submitted a legally binding offer to purchase all STADA Arzneimittel Aktiengesellschaft shares to the management team of the German pharmaceutical company.  The offer price will be at 58 Euros per share, totaling the offer at close to 4 billion Euros.  This offer is in response to London headquartered private equity firm Cinven Partners LLP’s indication that it may offer 3.5 billion Euros for Stada, or 56 Euros per share.

BLACKSTONE ACQUIRES TEAMHEALTH

On October 31st, TeamHealth agreed to be acquired by Blackstone for $43.5 per share. The offer represents a 33% premium since the board announced on October 3rd that it was exploring the possibility of selling the company to a private equity firm. On the day of the announcement, shares of TeamHealth jumped by 15%. Blackstone’s offer placed TeamHealth’s equity value at $3.2 billion.