Boston-based private equity firm HarbourVest Partners said that it had made an all-cash offer to buy Absolute Private Equity for $17.25 a share, thereby valuing the Swiss-based company at $752 million. This comes in the wake of a consolidation drive in the sector, primarily driven by the disposal of assets by international banks.
The offer is being made by HarbourVest’s secondary funds – which buy secondary interests (second-hand LP interests) in private equity funds from existing investors – together with its Amsterdam-listed vehicle HarbourVest Global Private Equity Ltd. HarbourVest is one of the world’s largest private equity fund-of-funds, with some $30 billion of assets under management. It makes direct investments in companies and also buys secondary interests.
Absolute is a private equity fund-of-funds and mainly invests in private equity and venture capital funds with other investments in distressed securities, mezzanine and the secondary market. Its net asset value per share is $24.16 as of April 21, 2011.
“HarbourVest is a leading global private equity investment firm and an ideal partner for Absolute Private Equity with its large experience in managing private equity partnership portfolios,” said Thomas Amstutz, chairman of Absolute Private Equity.
“This transaction offers shareholders an opportunity to exit their investment for cash at an attractive price, while it enables others to remain invested alongside an experienced partner,” he added.
The offer is subject to a 50.01% minimum acceptance level and the prospectus will be published in early June at the latest. The deal is expected to close in the third quarter of 2011.
The acquisition comes weeks after HarbourVest backed NewQuest Capital to buy Bank of America Corp’s non-real estate private-equity assets in Asia. Several banks are selling hedge fund and private equity businesses, as they move toward the goal of the so-called Volcker rule that regulators must implement as part of the new US financial regulation law. The rule limits banks’ total investments in private equity and hedge funds to 3 per cent of their core tier 1 capital and individual investments in a fund to 3 per cent of the fund’s assets. The rule aims to improve financial stability at banks following the financial crisis.