Wall St. comes to Wacouta St.: What's a name worth?

I started this blog partially to highlight "deal" news that doesn't make the national/Manhattan level. But today the Wall St. Journal came to us!

In this article, the Journal discusses the Polaroid s363 auction out of Petters' Group's Chapter 11 filing. The deal was portrayed as a marquis example of the "new world of mergers and acquisitions" -- a world where Vultures soar high. Stephen Spencer of Houlihan Lokey handled the auction.

It appeared that Patriarch Partners (NY) auction bid of $88.1 million had won the iconic Polaroid. But later Judge Kishel announced that Polariod creditor committee preferred a $87.6 million cash-and-equity bid by PLR holdings, a joint-venture bid of Hilco (Trnto)/Gordon Brothers (BSTN). PLR offered the maximum 25% equity. Apparently, the creditors were attracted to the capitalization structure (particularly the minority shareholder's rights) that PLR offered.

Polaroid was purchased in 2005 for $426M. Ouch.

Given the utter implosion of the paper film industry, the purchase is primarily buying the goodwill/name-brand of Polaroid.

(The Strib had different bid #s: $86.4 for Patriarch and $85.9 for the JV.)

With $400M in FY08 revenue, the sale yields a 4.6x price-to-revenue multiple. Not a particularly helpful datapoint, but one nonetheless.

This is only the latest iteration of the Polaroid bankruptcy proceedings. There have already been 2 other 'sales'. On March 30, Partriarch appeared to have won with a $59.3M bid. PLR won the second 'sale' with $72.6M.