1. This piece appeared in the Financial Times on May 4, 2020. "." indicates that a part of the article has been omitted.Cinven and Advent, the private equity firms behind the planned 17.2bn acquisition of Thyssenkrupp's lifts business, are searching for other investors to help them pay for Europe's biggest buyout deal in a decade, according to people with direc knowledge of the situation. The two groups are seeking to pull in additional equity to reduce their own exposure to the deal. They have spoken to investors including Canadian rival Brookfield, which was earlier defeated in the multi-month auction for the lifts division,

and the Canada Pension Plan investment Board, people with direct knowledge said. The elevators deal was struck in February, just as the crisis caused by the coronavirus pandemic started to roil markets. Its hefty 17.2bn price tag was emblematic of a multiyear boom in private equity-backed deals that had pushed asset prices higher. While buyout firms often sell on chunks of equity after agreeing to large deals, the crisis has left Cinven and Advent trying to sell down at a high price tag when some investors have less funding to allocate to private equity. This has caused the process to take longer than usual...People close to Cinven and Advent said the majority of the equity syndication was accounted for and only a small chunk remained. Even if no more investors came in, the groups would still be able to complete the acquisition, the people said; the risk is only that they would end up holding more of the business than planned. Typically, buyout groups try to avoid having too much of a fund concentrated in one deal because it can drag on overall performance if it goes badly. Advent's latest fund is worth $17.5bn and Cinven's is 10bn... Speculation has also mounted over whether Advent and Cinven will look to sell parts of Thyssenkrupp's lifts business, such as the North American unit, after the deal completes. The battle for Thyssenkrupp's

lifts business was fiercely fought over for months, before Advent and Cinven finally saw off competition from Brookfield, Finland's Kone, and an investor group led by Blackstone and Carlyle. ... The Thyssenkrupp lifts unit, which employs more than 50,000 people and generated 8bn in sales last year, is widely seen as relatively recession-proof because the majority of its revenues come from contracts to service elevators. The share prices of rivals Kone, Schindler and Otis have not been hit hard by the crisis.But the sheer size of the deal has complicated matters. Advent and Cinven's bid values the company, whose lifts are installed in skyscrapers such as One World Trade Centre in New York, at about 14 times its adjusted earnings of just under 1.2bn, two people familiar with the matter said at the time of the deal. Its total leverage, the ratio of its debt to earnings, will be about eight times, one of the highest levels recorded on a large European private equity buyout in recent years. The deal is scheduled to close in July, people familiar with the process said. None of those contacted said they expected it to fall through, a prospect that would be disastrous for Thyssenkrupp. The German industrial conglomerate is relying on the money from the sale to fund billions of euros worth of pension liabilities and shore up its remaining steel,automotive and materials businesses.

A. [3 points] What kind of acquisition does the article describe?

B. [3 points] Is this a traditional private equity acquisition? How many funds are involved? Why?

C. [2 points] Was there competition to buy this unit? What is the expected effect of competition on the offered price?

D. [2 points] How much debt is used in the transaction? Do you think that the level is sustainable? Why?