Term Sheet

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What is Silver Lake worth?

May 1, 2012: 3:40 PM ET

Valuing private equity's technology specialist.

FORTUNE -- Yesterday we wrote about how The Carlyle Group has received annual "valuations" from the California Public Employees' Retirement System (CalPERS), ever since selling a 5.5% equity stake to the pension system in 2001. But Carlyle is not the only unlisted (for now) private equity firm to have sold a piece of itself to CalPERS.

Silver Lake Partners, the tech-focused firm known for deals like Skype and Seagate, sold a 9.9% equity stake to CalPERS in the middle of 2008. The investment was reported to be worth $175 million at the time, although subsequent CalPERS disclosures put it just a few million dollars lower.

Through the end of last June, the investment was worth $329.74 million, according to the pension system's latest investment report. That would have put Silver Lake's enterprise value at approximately $3.33 billion. That's nearly double the 2008 figure, and 36% higher than June 30, 2010.

But there is that pesky lag with CalPERS reporting, which means the $3.33 figure is already 10 months old.

So, to get a more accurate understanding, let's look at what's happened to the market caps of three publicly-traded private equity firms -- Apollo Global Management (APO), The Blackstone Group (BX) and Kohlberg Kravis Roberts & Co. (KKR) -- during that 10-month span.

On average, the value of each firm has fallen nearly 19% since the end of last June. If applied to Silver Lake, that would put its current value at around $2.7 billion.

This is hardly a perfect calculation, given that: (1) Silver Lake is almost entirely focused on private equity, while firms like Blackstone have several businesses that actually are larger (like real estate); (2) Public market valuations of PE firms are poorly-constructed (more on that Thursday); and (3) The Carlyle Group is expecting to price just around 8% lower than its latest CalPERS valuation -- still a decrease, but not nearly so steep.

So $2.7 billion is our current market cap for Silver Lake, albeit with several important caveats. So just consider it a benchmark if Silver Lake ever does consider a dip into the public equity pool.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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