Private Equity Fun

From The Evening Standard:

One of London's biggest bus companies today buckled under the weight of its own debt and collapsed into administration only to be bought immediately by its one-time owner Stagecoach.

The acquisition of the East London Bus Group marks Stagecoach's return to the London bus market. It sold the operator of the Selkent, Thameside and East London bus brands to Australian bank Macquarie for £263 million four years ago, only to buy it from the adminstrator KPMG today for £52.8 million...

Explaining Stagecoach's decision to sell the business to Macquarie in the first place, finance director Martin Griffiths said today: “If someone gives you more than a business is worth, you would sell. At the time, Macquarie offered us a price that we thought was great value for our shareholders. We were running it profitably at the time, and expect to do so again. It's a good opportunity for us to return.”

Yippee! Our heroes, people who owned and ran a decent business, made a cool £200 million out of some foreign investment bank smart arses. What's not to like? The article continues:

Candover, once a leading light in the buyout industry, is closing down its £2.5 billion flagship fund after running out of money on deals including gambling group Gala Coral, on which it wrote off millions alongside fellow players Cinven* and Permira last year.

Other high-profile private equity deals of woe include Apax's £750 million stake in magazine group Emap, which it wrote down to zero last year, and Fitness First, the gym chain that reported a £242 million loss on last year after owner BC Partners** paid off a £642 million interest payment on its loans.

* See also this tale of woe.

** See also this tale of woe.