Buyout Trend: Exits Easier Than Dealmaking


June 27, 2013

Large-sized PE buyouts done at the height of the leveraged boom are finding buyers, reports Dealbook blog. It notes “doubles” and “triples” achieved by the likes of Apollo, Warburg Pincus, and Blackstone. The report says that exits are easier these days than buying new companies and doing deals. About USD 62 billion has been invested in companies this year, according to Thomson Reuters.


That’s slightly more than all of last year, says the report, but it cautions that two mega-deals, the Dell and Heinz buyout, are skewing the results. The investment trend is actually quite slow. The PE industry has USD 187 billion of dry powder to do deals, according to Preqin. At typical leverage ratios, that could amount to more than USD 700 billion of deals.


“At this year’s rate, it would take decades to put that money to work,” says Dealbook. Two things are driving the blockage for PE dealmakers : skeptical boards wary of leveraged buyouts on the sell side, and wariness of current valuations on the buy side.

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