Does Private Equity Have to Do Deals?

Private Equity funds are in the business of doing deals and buying into companies. What they want to see is usually the opportunity to do something with a flagging business, and to have their strategy for growth ready before signing the Term Sheet. In Carlyle's case, the market is thinking its vitamins deal is not that great, as the opportunities to grow it seem to have been taken.
The suspicion is that Carlyle needed to show its Limited Partners that their money was better off with them, rather than in gold.

Not so fast. In my opinion, the products are beautifully designed (check out the bottles), and with an aging population, there is always growth opportunity. I think it is a smart addition to their portfolio
Here's an interesting take by Christopher Swann, Breakingviews, National Post

Carlyle Group is hoping a big dose of vitamins will boost its portfolio. The private-equity firm's US$3.8-billion purchase of supplements-maker NBTY is its biggest deal in years. But it's not immediately clear what extra juice Carlyle can add to the business to generate outsized returns. Without that, NBTY could just be a deal for a deal's sake.

Carlyle has had to sate its appetite with small snacks in recent years. Its last deal on this scale was back in December 2007 with the US$6.3-billion purchase of HCR Manor-Care. Yet for all its waiting to jump back into big deals, Carlyle's latest target would appear to lack some of the wrinkles private equity firms usually find so attractive.

True, NBTY has recently fallen out of favor with investors -- losing a quarter of its value since mid-April. But Carlyle is offering a 57% premium, more than making up for the shortfall -- and even surpassing the company's all-time high set back in 2007. The enterprise value -- at just over eight times this year's EBITDA -- falls smack in line with the buyout median since the start of 2009.

 http://www.financialpost.com/Carlyle+takes+dose+vitamins/3284358/story.html#ixzz0u2Z9al8l