Shift for SAC's Cohen
Hedge fund magnate Steve Cohen is now dabbling in private equity.
In a somewhat surprising move, Cohen's $12 billion SAC Capital Partners behemoth is stepping up to the plate to help finance a $3.1 billion management-led buyout of Laureate Education (LAUR). The Connecticut-based hedge fund is part of a group of investors taking the higher education company private in a deal led by Laureate CEO Douglas Becker, Kohlberg Kravis Roberts and Citigroup's (C) private equity arm.
There's nothing surprising in finding a private equity giant such as KKR heading up another leveraged buyout. But it's not every day that Steve Cohen gets involved in an LBO.
A spokesman for SAC declined to comment on the deal, which includes the assumption of $700 million in debt. But people familiar with the hedge fund say this is the first significant LBO involving SAC.In the deal, the buyout group is proposing to pay $60.50 a share for Laureate, which represents a 23% percent premium to the stock's closing price on Jan. 4. That was the day before the company's board began negotiating a deal with its CEO and the buyout group. The deal is also being financed with debt provided by Citigroup and Goldman Sachs (GS). It's not clear if the Laureate deal, which also includes several small hedge funds, marks a shift in investment strategy for Cohen and SAC. It's possible that Cohen is sinking money into Laureate simply because he sees it as a good investment. As of the end of September, SAC had a small equity position in Laureate, owning less than 50,000 shares.
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