Eagle Merchant Partners said it's not interested in selling the assets of Arcapita to private equity firms at a bargain, The Wall Street Journal reported. Arcapita, a Bahrain-based private equity and investment company, emerged from US bankruptcy protection in September, another WSJ report said.
On behalf of its former parent bank, Eagle Merchant is taking care of Arcapita's five legacy portfolio firms even as it looks for new deals. Stockton Croft, who headed Arcapita's US private equity told the WSJ, "Every private equity firm has called to try to buy our companies at cents on the dollar." However, he said a sale of those companies won't be happening.
Under the terms of the bankruptcy plan which was approved by a bankruptcy court three months ago, Arcapital was given five years to pay back its creditors. This means there is no immediate pressure for Eagle Merchant to divest the legacy firms so it could repay the lenders of the bank. Croft added, "We anticipate an orderly process to sell these in the next couple of years. All of the companies are performing really well, I highly doubt it will take the full five years."
Last year, Arcapita sought bankruptcy protection in the US. Its assets, valued at around $7 billion, included a South Carolina log home manufacturer and a Florida fashion accessories boutique. In the same month that Arcapita emerged from bankruptcy, Eagle Merchant also left the company.
In July, Arcapital divested one of the companies in its legacy portfolio. It sold logistics firm 3PD Inc in a sale which, according to Croft, doubled the equity check worth around $80 million that Arcapita wrote to purchase the firm seven years ago.
Eagle Merchant is now also looking to create its own asset portfolio, announcing an acquisition deal earlier this week for Vasari, a franchisee of Dairy Queen, the report said.
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