Frederick Lipman, a partner at Blank Rome focusing on mergers and acquisitions, was quoted in USA Today on the buyout of HCA, the nation’s largest hospital operator, by a group of investors in the biggest leveraged buyout since the late 1980’s. A trio of powerhouse buyout firms will pay HCA stockholders $51 a share in cash. The investor group will also assume  $11.7 billion in HCA debt, bringing the value of the deal to about $32.5 billion, eclipsing the $31.1 billion value, including debt, of the buyout of food and tobacco giant RJR Nabisco in 1988, another LBO by Kohlberg Kravis Roberts.

The deal is the latest sign of the growing clout of cash-rich private equity firms, which pool money from wealthy investors and big institutions, then seek out-of-favor investments to buy and fix up in hopes of netting sizable returns quickly. Private equity has accounted for a third of all merger activity this year.

Investor demand, says Fred Lipman, is a factor in the burgeoning size of private equity deals. Pension funds and other large institutional investors are hoping to get in on the massive returns private equity firms have reported so far, says Mr. Lipman, "The problem is, the market is moving sideways," he says. "Investors have no place to put money to make more, so they're going into private equity." He also notes there is no "guaranteed return."

“HCA Agrees to Be Bought Out for $20.8 Billion” by Adam Shell and Matt Krantz appeared in USA Today on July 25, 2006.