DEARBORN, Mich. — Private equity firms flush with cash but short on deals could be candidates to purchase troubled Ford Motor Co.
Plus, easy debt financing and growing fund sizes are making heretofore unreachable large public companies fodder for private equity funds, said Michael A. Wilson, managing director of private equity firm TA Associates, Boston.
Some insiders think traditional buyout firms would court Ford. Others say firms that specialize in investing in distressed companies would pursue the automaker. In both cases, however, there are drawbacks.
Ford does not meet the typical guidelines of large buyout firms, which look for stable and predictable cash flows, Mr. Wilson said. The big players normally avoid cyclical industries like the automotive industry, he added.
On the other hand, "Ford is not a traditional distressed investment. The company is stressed, but not distressed," said Jonathan Rosenthal, partner in Santa Monica, Calif.-based distressed firm Saybrook Capital LLC. Mr. Rosenthal worked on the turnaround of United Airlines.
The list of possible suitors for Ford is all over the lot: distressed buyout/turnaround specialists Cerberus Institutional Partners, Lone Star Partners and AMVESCAP's newly acquired WL Ross & Co.; buyout firms The Carlyle Group; One Equity Partners, a JPMorgan affiliate, and Clayton Dubilier & Rice Inc.; and firms that do both distressed and more straightforward buyouts such as Texas Pacific Group and Blackstone Group.
Executives at these firms either declined to comment or denied interest in buying Ford.
So far, Ford executives will neither confirm nor deny that the company is for sale. But insiders say shareholders think that a deal to take the entire company private is in the works.
Last week, Bill Ford, chairman and chief executive officer, said in a statement that Ford — whose market capitalization is beginning to sink below $15 billion — would sell its Aston Martin U.K. auto line to generate cash to restructure the firm. Some believe Ford also is preparing to sell other parts of the company, including its Jaguar and Land Rover lines.
Executives late last year jettisoned rental car company Hertz Corp. to a consortium of private equity firms lead by Carlyle Group, Washington. And Ford is in the midst of a strategic review of its entire business.
"Bill Ford has said many times before (that) we are looking at all aspects of the business, and everything is on the table," said Tom Hoyt, Ford spokesman.