Private equity firm adopts CLO techniques

Various media reports that private equity firm Kidd & Company is using CLO techniques to fund some of their deals.

The private equity firm will be involved in the operation turnaround and restructuring process in order to get its acquiree’s loans to perform. Once achieving performance levels, Kidd’s investment-banking affiliate, Glenville Partners, will package the debt into CLOs.

Such securitisation methods should allow Kidd to partially cash out of the underlying companies and reinvest the proceeds into new acquisitions.

The first deals are expected to come to market through private placements in three to six months. They will be backed by loans to a financial, totaling $50 to $100 million, as well as by a medical-equipment leasing company, totaling $30 to $50 million.