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PE HUB Wire Highlights, 10.19.18

H.I.G.’s third growth fund raises $970 mln; Carlyle’s Marchick to leave firm; Fairview Capital loses third partner in two years

Chris is on vacation so I, Luisa, will be your MC this morning. How is everyone doing?

Companies owned by 16 large PE firms have weaker credit quality than speculative-grade companies that are NOT backed buyout shops, Pension & Investments is reporting. The story said 92 percent of 308 firms rated by the Moody’s Investors Service since 2009 that were purchased through leveraged buyouts are rated B2 or below. This compares with 40 percent of companies that are not sponsor-owned.

Of course, falling credit metrics at the companies, failure to improve financial performance or weak liquidity resulted in Moody’s downgrading the 92 percent, P&I said. “PE firms’ focus on shareholder returns and high leverage has translated to a weaker rating distribution for their sponsored companies than for spec-grade debt issuers without such sponsorship,” Moody’s analyst Julia Chursin said in the story.

Now, Hubsters, some of you have told me that you have issues with how Moody’s gets to its ratings, that its math is unrealistic. Do you still believe this? Why or why not? Email me at lbeltran@buyoutsinsider.com

Lots of deal and fund news this morning.

Lynn Tilton’s Patriarch Partners is looking to sell Dura Automotive Systems IncBloomberg is reporting. Dura could fetch $1 billion, the story said.

H.I.G. Capital has raised $970 million for its third growth buyout fund.  H.I.G. closed its previous growth buyout fund at $500 million in 2011. Read Iris Dorbian’s story here.

Acadia Healthcare is in talks with PE firms after attracting buyout interest, Reuters is reporting. The company has a $3.8 billion market cap.

Anyone with foot issues knows Vionic Group, which makes specialty footwear and orthotics. Caleres is buying Vionic for $360 million, providing an exit for Alpine InvestorsSee our brief here.

Departures: Another leader at Carlyle Group is moving on. David M. Marchick, who is credited as one of the architects of Carlyle’s transition from a boutique PE firm to a globally traded asset manager, is exiting, the Washington Post said. Marchick is moving to a senior adviser role and will leave the firm by the end of the year, the story said.

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