M&A Roundup: Deere In Private Equity Headlights, IPOs In Flight

Deere in Private Equity Headlights: It sounds kind of whacky, but Deere & Co. (DE) was approached by a private equity firm. And, of course, investors pushed-up the stock 3%.

But, management does not want to go private - at least not now. After all, the deal would be huge (the market cap is $22.5 billion). Also, the company is in a highly cyclical industry. Then again, with the frothiness of the credit markets, this might actually be a non-issue.

TSG Raises Only $875 Million? In the brave new world of private equity, it seems that if a fund has less then $1 billion, it doesn't exist. Well, there are still some of these funds.
One is TSG Consumer Partners, which focuses on branded consumer companies. Actually, the team has had a strong performance record - averaging 59% per year since 1987.

Have Private Equity, Will Travelport: Travelport, which is a major airline bookings processor, announced it will shell-out $1.4 billion for Worldspan, another big player in the space. This transaction makes a lot of sense - that is, scale makes a difference in this business (especially with the threat of the Internet). Actually, not long ago, it was Blackstone Group and Technology Crossover Ventures that spent $4.3 billion to buyout Travelport. Oh, and yes, Worldspan is also a private-equity backed firm.

IPOs in Flight: IPO investors were definitely hungry on Friday. There was Heelys (HLYS), which saw a 55% increase in its stock price to $32.60. The company develops cool kid shoes which convert into skates.

The company is growing quickly. However, there are big risk factors: the company has mainly one product offering; the audience is fickle; and there is a problem with knock-offs.

Next, Allegiant Travel (ALGT) went public, with the stock price surging $7.10 to $25.10. This is a low-cost upstart airline that focuses on neglected markets. The company has been smart in terms of generating ancillary revenues, such as travel packages and online offers. The company also avoids electronic ticket processors and instead sells directly -- mostly through its web site. The company calls itself "Expedia with wings."

Prediction That Turned Out Right: Recently, I did a piece for the Motley Fool on a small software company, Docucorp (DOCC). Based on valuation, I thought it was a good buyout candidate. Well, the company did sell out last week. Here's a look.