TPG Capital’s and other owners’ $180 million termination fee from Univision hits anniversary, but no exit
April 13, 2016
Univision news anchor Jorge Ramos. Photo Credit: (NASA/Bill Ingalls)
Univision news anchor Jorge Ramos. Photo Credit: (NASA/Bill Ingalls)On April 14, 2016 Univision hits the one-year anniversary of its $180 million “termination fee,” paid to its private equity owners in 2015. Univision has not yet held a public offering, although it filed for an IPO in July 2015.
Over the nine years TPG Capital and a consortium of other private equity firms have owned Univision, they collected fees of over $570 million. A report is available here.
The termination fee (also known as an accelerated monitoring fee) paid to TPG and PE sponsors is on top of annual management fees and expenses of at least $193 million and at least $200 million in transaction fees.
Fees collected since 2007 (in millions)
| Termination fee | April 14, 2015 | $180 | $180 |
|---|---|---|---|
| Transaction fee | March 1, 2007 | $200 | $200 |
| PE sponsors management fees & expenses | 2007-1Q 2015 | $139 | $193 |
| PE sponsors tail period fees & expenses | 2Q-4Q 2015 | $14 | |
| Televisa management fee | 2010-1Q 2015 | $32 | |
| Televisa tail period fee | 2Q-4Q 2015 | $8 | |
| Total | $573 |
Questions:
- Why did TPG and the other sponsors collect a termination fee in advance of exiting Univision?
- Did TPG and the other sponsors disclose the fee arrangements at Univision to limited partners in the funds that own the company?
- How has paying $570 million in fees to its sponsors helped Univision’s strength as a company? How did such fees benefit private equity limited partners?
- Will TPG continue utilizing accelerated monitoring fees/termination fees for TPG Partners VII, despite SEC scrutiny of the practice? What about other TPG funds?