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.

Issue 22

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.

CARLYLE AND GIC ACQUIRE SPECIALTY CHEMICALS BUSINESS

The Carlyle Group and Singapore’s Sovereign Wealth Fund GIC have announced their intention to acquire the specialty chemicals division of Dutch conglomerate, Akzo Nobel, for a price of €10.1 billion ($12.6 billion). This purchase price includes debt. The specialty chemicals business of Akzo Nobel manufactures a variety of chemicals used in many consumer products, including soap, food products, pharmaceuticals, and adhesives.

SALESFORCE ACQUIRES MULESOFT – THE TALE OF A UNICORN

On March 20th, 2018, Salesforce announced a deal to acquire MuleSoft (NYSE: MULE) for $6.5 billion. The deal represents a 36% premium over MuleSoft’s current share price. Salesforce’s shares were relatively flat during regular trading and dipped slightly (-2.3%) during after-hours trading, while MuleSoft’s shares jumped 27% in regular trading and an additional 4.6% in after-hours trading.

UPDATE: UNILEVER AND KKR

After an active process with several private equity funds involved, Unilever has decided to sell its margarine and spreads business (Becel, Flora, Country Crock, and Blue Band brands) to KKR for $8.04 billion. KKR is a global investment firm that manages multiple alternative asset classes. The firm has $153 billion in assets under management and has a long history in the consumer sector.