Buyout Hotspots: Risks and How to Manage Them


September 20, 2012

The FT had a report this week on private equity and capital market trends in so-called “frontier” regions like sub-Saharan Africa, which suggested to us that PWC’s report published early this year about investing in BRIC countries, the most recent “hotspots”, may be worth reviewing.


The report titled, Getting on the Right Side of the Delta: A Deal-maker’s Guide to Growth Economies, explores how to reduce the chances of pre- and post-deal problems. It shows how to avoid doing bad deals, how to successfully complete on good deals, and how to make sure a good deal doesn’t turn bad.


It says that nearly 40% of deals failed to complete because of a valuation mismatch. Three other issues explain another 50% of problems, specifically teams fail to obtain approval from the government, financial information is less transparent, and often there are non-compliant business practices (corruption, labour and tax compliance). Some 30% of post-deal problems concern partnering. (Image source: PWC)

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