How is Madison Dearborn doing with its sale of Nuveeen Investments? Who knows.

Dan Primack, an M&A columnist and senior editor for Fortune, argues that Madison Dearborn did better than break even on the sale, though the details are anything but clear.

Madison will sell Nuveen for $6.25 billion, while it bought the firm for $6.4 billion seven years ago. Though Madison wasn't the only investor to fork over the $6.4 billion. It led a coalition of several private equity firms, putting in $2.7 billion of its own money.

During the financial crisis, another private equity investor had also sold its stake in Nuveen to Madison Dearborn for an undisclosed discounted sum. This means Madison doesn't have to share as much of the sale price with other investors now, but it probably shelled out more than $2.7 billion initially.

Nuveen had also bought FAF Advisors for $80 million in the end of 2010, but that amount probably isn't big enough to affect the current sales tag of Nuveen.

The purchase price of the firm also includes $4.5 billion in debt and $1.75 billion in cash. In addition to the $1.75 billion, Madison will get to keep all of Nuveen's balance sheet cash, as well as some of Nuveen's seeding products, which, in total, Primack estimates to be worth $600 million. This effectively means Madison will be walking away with $2.35 billion.

Madison Dearborn will also receive a small and undisclosed earn-out on the sale over the next three years, which could be profitable as Nuveen's performance has been improving. Its EBITDA rose to $404 million, from $327 million in 2007 and $253 million in 2009.

This puts Nuveen's $6.25 billion sales price at 15 times its EBITDA and at 2.8 percent of its $221 billion in assets under management.

 

Edited by: Anastasia Donde


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