Filed under: Private equity , ALLTEL Corp (AT) , Goldman Sachs Group (GS) Despite all the rumors, the $24.7 billion buyout of Alltel (NYSE: AT ) got done . With the credit crunch and botched deals, the stock definitely showed volatility. But, the private equity folks at Texas Pacific Group and Goldman Sachs (NYSE: GS ) certainly didn't lose interest in the company. The stock price on the transaction was $71.50. No doubt, Alltel made some key strategic moves to make itself attractive to private equity sponsors. Perhaps the most important initiative was the spin-off of its wireline business in 2006. Basically, this provided more focus for the company. To get some more perspective on the deal, I checked out the proxy disclosures . Alltel took the approach of a quicker auction - so as to minimize leaks as well as try to get a better valuation. Alltel had its financial advisors put together a summary LBO (leverage buyout) analysis. The estimates ranged from $59.75 to $70.50. This assumed that the company could fetch 6.5x to 8x multiples on EBITDA by 2012, which would produce a return ranging from 17.5% to 22.5% per year. All in all, this looks like a textbook example of a quality deal. Yet, there are certainly risks. After all, Alltel will need to manage a debt load of $23 billion. Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates Dea ...
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