The vast majority of deals are currently done between private equity players… One private equity player will sell to another one who is happy to pay a high price because they have attached a lot of investors.
When you know you are able to exit your stake to another private equity house for multiple of, let’s say, 20, 25 or 30 times earnings, of course you won’t mark down your book… That’s why I’m talking about a Ponzi because it’s a circular thing.
Intuitively, this makes sense. Last year, with a vibrant US stock market, private equity firms hit an exit frenzy, reaping billions for their investors. But with the IPO market in a drought and strategic buyers growing more cautious, PE firms are running out of options. These days, to exit, they will have to sell their portfolio companies to each other.
A few recent deals may have caught Mortier’s eye. In April, KKR & Co. agreed to buy Barracuda Networks Inc. from tech-focused Thoma Bravo LLC, in a deal that…
