Even as private equity (PE) funds in the U.S. anticipate a likely increase in capital gains tax rate by year's end, PE firm American Securities LLC has managed to sell Pittsburgh-based NEP Broadcasting LLC to another PE firm Crestview Partners for reportedly $800 million to avert a potentially larger tax bill for such a deal in the new year.
Reports suggest that capital gains tax rates in the U.S. could rise to 20 percent from 15 percent if politicians fail to act on a Dec. 31 deadline to avert the "fiscal cliff" of tax increases and spending cuts. However, American Securities, which has over $8 billion in assets under management, has not make an official statement regarding the deal.
NEP Broadcasting, provider of trucks used as mobile production units for television networks such as ABC, Fox and ESPN, has grown to be the No. 1 provider of mobile broadcast facilities in the U.S.
"Under American Securities' ownership, they really undertook a significant upgrade of the equipment as high-definition broadcasting became predominant," Jeff Marcus, a partner at Crestview told reporters.
NEP has increased revenue and its employee base by more than 75 percent since 2007. The company employs over 700 engineers, technicians and other support staff. Co-founder and chairperson of NEP, Deb Honkus, will remain invested in the company together with other members of management.
American Securities acquired NEP from Apax Partners LLP and Spectrum Equity Investors in 2007. By then, NEP was already the biggest provider of independent television production studios and services in New York City.
For the current deal, which was completed in a mere 40 days from the time the talks were initiated, Barclays, UBS and AGM acted as financial advisers to NEP, while Morgan Stanley advised Crestview. Barclays, Morgan Stanley and GE Capital provided financing for the transaction.
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