Buyouts are getting complicated

Qualtrics International

13/04/2023 17:42

(The author is Reuters Breakingviews a columnist.  The opinions
expressed are their own.)
       NEW YORK, April 13 (Reuters Breakingviews) - Selling a
company to private equity firms, with their deep pockets and
lack of competitive overlap with regular corporations, ought to
be relatively easy if both sides can agree on a good price. But
sale processes for hand sanitizer maker Diversey  DSEY.O  and
survey software developer Qualtrics  XM.O , revealed in
regulatory filings this week, suggest that things aren’t as
simple they once were.
    Diversey’s $5 billion sale to Platinum Equity-backed Solenis
shows an odd wrinkle. The terms say that the buyer cannot be
forced to close before Oct. 15 – seven months after the deal’s
announcement. A Tuesday proxy filing shows that’s to give
Platinum enough time to sort out its debt financing. With credit
markets shuttered, buyers are struggling to cobble together
loans. The negotiations included other unusual jostling, from
debating the seller's right to get a court to force the deal to
close, to when it must turn away interloping bidders.
    Qualtrics, meanwhile, sold in March for $12.5 billion – but
it turns out it almost got more. An unnamed bidder offered $21
per share, more than the $18.15 that Qualtrics accepted from
Silver Lake and CPP Investments. That bidder was Thoma Bravo,
the Financial Times reports. Thoma Bravo has found itself a test
case for U.S. antitrust watchdogs concerned that private equity
firms’ focus on rolling up businesses in certain industries
might be a competition concern. Its directors have been forced
off boards, and its pending deal for ForgeLight is undergoing a
lengthy investigation. Qualtrics rejected its bid.
    The outcome is the same: Both companies sold. But they did
so at a cost, of delays for one and a lower price from the
other. Buyouts are getting done, but they’re also getting
complicated. (By Jonathan Guilford)
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 (Editing by John Foley and Amanda Gomez)
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