The fund will fetch such resources out of the proceeds of AOC sale to Nippon Paint Holdings and the dividends that Novo Banco is going to cut.
US private equity Lone Star’s investors may raise 3.5 billion US Dollars, Bloomberg reported.
The Dallas-based buyout firm announced the sale of its porfolio company AOC, a manufacturer of special chemical items, to Nippon Paint Holdings on the ground of an enterprise value of 4.35 billion (press release) and marked an above 3X return while fetching proceeds of 1.8 billion. The 1.1 billion dividends of Portuguess Novo Banco will soon provide the fund with further cash. However, an IPO of the bank may allow Lone Star to raise further money. Mark Bourke, the firm’s ceo, reportedly said that Novo Banco may list between June and September (Reuters). Titan Acquisition Holdings, a provider of ship repair and marine and heavy equipment manufacturing services that Lone Star acquired from Carlyle Group and Stellex Capital Management in 2023 (press release), and GTT Communications, an asset that is no longer under Chapter 11 administration, may provide the private equity with further resources (press release).
Lone Star, born in 1995, handles more than 85 billion worth assets through private equity and credit strategy. In 2019, the firm launched Fund XI. Bloomberg quoted sources as saying that such vehicle already generated a 0.9X DPI (distributions to paid-in capital, ie cash to invested resources) ratio while the 2017 fund posted a 1.35X DPI. A Goldman Sachs report points out that after 2019, the PE industry generated a 0.1X DPI that in 2015-2018 amounted to an annual median of 0.6X.
In 2022 and 2023, international private equity struggled for carrying on exits and divestures dynamic recovered in 2024 boostigng the ratio of distributions to buyout fund contributions, Bain &Co Private Equity Report said (see here a previous post by BeBeez).
