A report from the Financial Times said European private equity firm Motion Equity Partners was in discussions with HarbourVest to get new capital. Citing sources, the potential deal with the Boston-based investment group would provide Motion Equity with two additional years until 2017 to make its EUR 1.25 billion a reality. The fund was started in 2005, the sources said. They added that HarbourVest would buy the fund's existing commitments at a discount to net asset value. However, it will not change the terms, the report said.
The sources also said that the investors of Motion Equity will still need to accept the offer. Two backers also told the Financial Times that Motion did not accept an offer made last month by CPPIB. The Canadian pension plan had offered to purchase the fund's existing commitments at a 20% discount. The offer also included a reorganizing the financial terms for Motion as far as net asset value is concerned. The previous bid also included the infusion of new capital worth EUR 150 million.
Formerly called Cognetas, Motion is considered a "zombie" buyout firm, according to the report. The group of zombie firms have combined global assets worth USD 116 billion but are trying to stay in business after its coffers have become empty. One solution for these firms would be to get a new investor that can buy out the firm's existing positions and give it new capital to be able to finance deals.
Motion Equity Partners closed its offices in UK and Germany two years ago after suffering paper losses. It then focused its operations in France and Italy. Also, the firm's backers rebuffed approaches from Charterhouse Capital Partners and Electra Partners for its portfolio. There are now six companies that remain under Motion's portfolio. This includes Morrison Utility Services, Arcaplanet and Tokheim.
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