Settlement Seen As Win-Win For Firms
Two private equity firm’s very public fight has come to an end with observers calling it a win-win-win situation for everyone involved.
Two private equity firm’s very public fight has come to an end with observers calling it a win-win-win situation for everyone involved. Boston-based ABRY Partners and Providence, R.I.-based Providence Equity Partners started their legal tangle last year after ABRY bought publisher F&W Publications from Providence for $500 million. It wasn’t long after that ABRY sued the seller, charging that fraud led to an overpayment for F&W. Earlier this year, a Delaware judge nixed Providence’s motion to toss the case, but now the matter has settled. According to Dow Jones Newswires, Providence has agreed to invest in F&W to reduce ABRY’s exposure, and the firm will get a seat on F&W’s board, thus giving it a stake in how the company does. F&W benefits from the settlement, as well, as it “avoids the expenditure to F&W of additional finance and human resources to pursue the litigation.” Daniel Primack of PE Week has this take on the settlement: Litigation could have left ABRY looking like a litigious firm that didn’t do decent due diligence, and Providence would have been “forced to provide an uncomfortable level of transactional transparency.”