Wednesday, April 23, 2014

PEU Recaps: From Liquidity to Leveraged

Obtuse PEU's continued innovating names they foist on the public to hide loading up affiliates with debt so they can pay themselves huge dividends.  Two years ago the PEU boys referred to such events as "liquidity recaps."  They're now "leveraged recaps."  Much clearer?  Right!

They are dividend bleedings, a sponsor driven monetizing move.  Bain and KKR bled giant for-profit hospital chain HCA for $4.25 billion before taking the company public.  HCA, in another charitable PEU move, may help The Carlyle Group and TPG monetize Australian hospital chain Healthscope.  The price is said to be double for Carlyle & TPG, but that doesn't count PEU deal fees, annual management fees or any "leveraged recaps." 

Private equity has their lingo and I have mine, like private equity underwriter (PEU).  The PEU trade group I call PECKER, Private Equity Capital Knowledge Executed Responsibly.