Media Monitors sold among swarm of private equity deals

Media Monitors has been sold to Quadrant Private Equity in a deal reportedly worth up to $200 million, as the Australian private equity scene caught fire with a number of deals taking place yesterday.

The deals included US private equity group Providence Equity Partners buying Study Group for $660 million from fellow private equity firm CHAMP.

CHAMP in turn bought fence hiring group ATF Services from Quadrant for a reported price of about $250 million.

Meanwhile, private equity groups are reportedly circling health software provider iSOFT after a number of profit downgrades and a subsequent drop in its share price. The company itself blames volatility in Britain’s political system for a number of product delays.

It is understood these companies have sought out private equity deals instead of taking their chances on the sharemarket, due to the relatively poor performance of IPOs over the past few years.

Additionally, a new tax structure that allows some investments to be taxed as capital gains, rather than income, has also attracted a number of private equity firms.

CHAMP originally purchased Study Group in 2006 for about $175.6 million from British group DMG International. It is the fifth education business to be purchased by Providence, with managing director Patrick Corso saying in a statement he was interested in the company’s prospects in North America.

“With its award-winning education programs and facilities and an unparalleled network of partnerships with specialist education counsellors and universities around the world, Study Group is exceptionally well positioned to meet this important and rapidly growing demand among international students,” he said.

CHAMP also purchased fence hiring service ATF from Quadrant, but a purchase price has not been disclosed. The Wall Street Journal reported the purchase was made through a new buyout fund the company has been building up for over a year.

Additionally, Quadrant is now the new owner of Media Monitors, with the AFR reporting the deal closed for between $100-200 million. It is understood the deal used services provided by Royal Bank of Scotland and Merrill Lynch.

Media Monitors is expected to keep its current management, including chief executive John Croll, with the deal taking control from a number of shareholders including the family of Media Monitors founder Neville Jeffress.

In other private equity news, a number of companies including HgCapital, Duke Street Capital and General Atlantic are reported eyeing iSOFT, while some American funds are also possible buyers. Oceania Capital Partners, which holds a 26% share in iSOFT, has been named as a possibility.

The software provider, which focuses on the British health-care sector, hasn’t performed well this year. Its shares dropped 30% in a single day a month ago after it announced another profit downgrade. While the company itself has blamed a volatile British political environment, some analysts have blamed the firm’s management style.

It is understood various private equity firms are focusing on private deals in order to take advantage of a new tax system that allows firms to have certain investments taxed as capital gains, rather than income.