* Deal values NEP at around $800 mln - sources
* NEP's revenue grew by over 75 pct since 2007
By Greg Roumeliotis
NEW YORK, Dec 27 Private equity firm American
Securities LLC said on Thursday it sold a U.S. media production
company to peer Crestview Partners, in one of the clearest
examples yet of a firm rushing to close a deal before the end of
the year to avoid a potentially larger tax bill.
NEP Broadcasting LLC, a Pittsburgh-based provider of trucks
used as mobile production units for television networks such as
ABC, Fox and ESPN, was sold to Crestview for roughly $800
million, two sources familiar with the situation said.
Jeff Marcus, a partner at Crestview, described the
transaction as a 40-day sprint to the finish line from when the
talks first started. The deal was signed on Monday and money
changed hands the same day.
"It was important for American Securities to close the deal
by the end of the year," Marcus said.
American Securities, which has over $8 billion in assets
under management, declined to comment.
Taxes in the United States on capital gains - which American
Securities would have to pay on the sale - could rise to 20
percent from 15 percent, unless politicians act on a Dec. 31
deadline to avert the "fiscal cliff" of tax increases and
The tax issue has been controversial for private equity
firms. Major private equity fund investors such as public
pension funds and university endowments do not have to pay taxes
on capital gains, so they want deal decisions to be driven by
the profitability of the deal. Private equity fund managers,
however, face tax bills on their cut of profits from deals,
creating potential conflict of interest issues.
For New York-based American Securities, which traces its
roots to a family office founded in 1947, the situation is more
complex. The firm's investor base traditionally has included a
large proportion of high net-worth individuals and families, who
are taxed on capital gains.
American Securities acquired NEP from Apax Partners LLP and
Spectrum Equity Investors in 2007. NEP was already also the
biggest provider of independent television production studios
and services in New York City.
NEP has increased revenue and its employee base by more than
75 percent since 2007, American Securities said. NEP employs
over 700 engineers, technicians and other support staff,
according to its website.
NEP was co-founded by Deb Honkus, who is the company's
chairman, more than 30 years ago. She will remain invested in
the company together with other members of management.
"NEP has grown to be the No. 1 provider of mobile broadcast
facilities in the country. Under American Securities' ownership,
they really undertook a significant upgrade of the equipment as
high-definition broadcasting became predominant," said Marcus,
of Crestview, which has about $4 billion of capital under
Barclays, UBS and AGM acted as financial advisers to NEP,
while Morgan Stanley advised Crestview. Barclays, Morgan Stanley
and GE Capital provided financing for the transaction.