by Calculated Risk on 9/21/2007 02:19:00 AM
Friday, September 21, 2007
Report: Harman LBO Deal in Trouble
Another private equity LBO is in trouble.
From the WSJ: Harman's Suitors Sour on Buyout
The private-equity buyers of Harman International Industries Inc. are balking at completing the $8 billion purchase of the audio-equipment maker, people familiar with the matter said, as yet another leveraged buyout falls into a hostile tête-à-tête between buyer and seller.Based on previous reports, the average loss on recent LBOs has been about 4% of the
...
Should KKR and Goldman choose to break the deal, they would have to pay a $225 million termination fee, according to corporate filings. That fee is about 2.86% of the deal's value, which is somewhat lower than other transactions of a similar size, according to an analysis by MergerMetrics.com.
As an aside, the Harman business has recently underperformed expectations, probably as a direct result of the housing bust.