* CVC acquires majority ownership through recapitalization
* Deal comes 6 years after Hellman & Friedman investment
* AlixPartners valued at more than $1 bln-sources
By Soyoung Kim and Greg Roumeliotis
NEW YORK, April 24 Buyout group CVC Capital
Partners Ltd has agreed to buy the majority of restructuring
advisory firm AlixPartners, betting that the firm can grow in
turnarounds, where it made its name, and also in wider
CVC did not disclose a purchase price for the asset it has
agreed to acquire from peer Hellman & Friedman, but people
familiar the matter told Reuters last week the deal would value
AlixPartners at more than $1 billion.
AlixPartners CEO Fred Crawford said the deal ensures that
the company, which has advised on corporate restructurings, will
remain a stand-alone firm instead of merging into another
consulting firm looking to expand its footprint.
"A lot of our brand is pegged to restructuring because
that's the stuff that lands on the news and in the front page of
newspapers -- General Motors, Kodak, things like that. But this
is only one third of our business," Crawford said in an
"The rest is made up of operational consulting and what we
call financial advisory services which includes litigation
consulting and corporate investigations work. The
disproportionate growth trajectory in our business is really in
non-restructuring areas," he added.
AlixPartners' 125 managing directors, as well as founder Jay
Alix, will maintain a minority equity stake in the company.
Southfield, Michigan-based AlixPartners competes in the
restructuring and bankruptcy space with specialists such as FTI
Consulting and Alvarez and Marsal, as well as the
turnaround practices of major consulting firms including
McKinsey & Company, Boston Consulting Group and Bain & Co.
AlixPartners' recent high-profile assignments have included
advising General Motors Co on its ongoing restructuring
of its money-losing European Opel unit.
Since 2006, AlixPartners has grown from 550 professionals to
more than 950, expanded from 12 to 17 offices globally and
expanded into China, Hong Kong and the Middle East.
CVC said the deal would help further expand the geographic
footprint of AlixPartners, which derives one-third of its
revenue from outside of the United States.
CVC managing director David Tayeh said there was plenty of
value in AlixPartners left even after six years of private
equity ownership, with scope for the firm to expand in the $80
billion-plus consulting services market.
"While what the firm has accomplished thus far is
impressive, they're just scratching the surface. The notion that
a 30-year-old firm that had another financial sponsor as partner
is tapped out, or there is not much left to do, we just don't
believe at all," Tayeh said.
Hellman & Friedman led a leveraged recapitalization of
AlixPartners about six years ago, and acquired a majority stake
together with the company's employees.
The San Francisco-based private equity firm did not disclose
financial terms at that time, but said the transaction puts the
total enterprise value of the firm in excess of $800 million.
According to ratings agency Moody's, the 2006 leveraged
recapitalization transferred an 80 percent equity stake in
AlixPartners to a group led by Hellman & Friedman.
That transaction valued AlixPartners at $872 million, and
was funded with $296 million of cash equity from the private
equity firm, a $385 million term loan, and $218 of rollover
equity from the founder and management, according to Moody's at
A person familiar with the matter said the CVC would be
acquiring a stake similar in size to what Hellman & Friedman
Goldman Sachs Group and Bank of America Merrill Lynch
advised AlixPartners and Hellman & Friedman on the
transaction. Goldman, Bank of America have also provided
committed financing for the transaction along with Deutsche Bank
, Jefferies and UBS.
Morgan Stanley served as financial adviser to CVC