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 - Get Report) 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 - Get Report). 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.