An investor group led by Silver Lake has agreed to sell communications software company Skype to Microsoft (NASDAQ: MSFT) for $8.5 billion in cash.
Goldman Sachs and J.P. Morgan advised Skype on the sale. The Silver Lake-led consortium acquired its 70% stake in Skype from eBay for about $2.03 billion in 2009. Silver Lake's almost $1 billion investment will reportedly net the firm a profit of at least $2 billion and a return in excess of three times its investment.
Lately, PE investors have been able to find several strategic acquirers willing to fork over big bucks for their portfolio companies. Since the beginning of 2005, there have been 74 announced or completed exits in which PE investors are selling or have sold companies to corporations for at least $1 billion.
A renewed interest for these big transactions was sparked during 2010, when PE investors were involved in 25 sales to corporations, up from only 3 during 2009. With 10 such deals announced and completed so far in 2011, corporations' spending spree for large PE-backed companies appears to be continuing.
This trend bodes well for PE investors and their limited partners, as the announced and completed sales since the beginning of 2010 total over $75 billion of capital.