Companies in prominent buyout deals uncertain about future

By Rizza Sta. Ana

Sep 13, 2013 06:06 AM EDT

Companies involved in the biggest buyouts that were led by private equity firms during the acquisition boom are facing an uncertain future. According to a report by the New York Times' Dealbook, the future of Clear Channel Communications, TXU or Energy Future Holdings, First Data, SunGard Data Systems and Toys "R" Us were still in the hands of their buyers who had been working out strategies to reshape the companies to varying success.

Texas energy giant TXU, which had been renamed to Energy Future Holdings, was sold for USD45 billion in 2007. Investors of the company had been struggling as the outlook of the natural gas market had been slim, reducing the chances for Energy Future to recover. First Data, acquired by KKR in 2007 for USD29 billion, had employed a senior JPMorgan Chase executive to lead the company. The credit card processing company resurfaced recently when in an attempt to improve their numbers, suspended 401K contributions of employees and awarded them company stock instead to improve their numbers.

After being bought by Bain Capital and Thomas H. Lee Partners for a whopping USD19.5 billion in 2008, Clear Channel Communications has yet to repay its debt amounting to billions of dollars. Clear Channel had then resorted to debt markets in order to ease its financial strain. SunGard Data Systems, bought for USD11.3 billion by seven private equity firms in 2005 looked to corporate manuevering to keep the company afloat. The company owners took a USD720 million dividend through borrowing in 2012, and is reportedly considering to sell one of its units. Toys "R" Us had since withdrew its IPO filing this year. According to a 2012 New York Times report, owners of the toy retailer were having difficulties on how to grow the beleagured company.

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