According to a recent article in Pitchbook, “The US private equity industry is putting up ludicrous figures.”
This is how they described what they have seen so far in 2021:
Dealmaking, exit activity, and fundraising are all trending toward record figures. Performance, being driven by a buoyant stock market, is coming along nicely, as well. Dealmaking is red hot up and down the size spectrum. Nearly three-quarters of all deals have been add-ons through the first six months of the year.
Many of US PE's annual records will be broken this year.
As we have said before, when you consider your exit targets, you should research to determine if any PE firms are active in your industry, who they have acquired in the past, and what their add-on strategy may be.
Since almost three-quarters of all deals closed so far this year have been add-ons, and add-on (or bolt on) acquisitions tend to be smaller companies, even if you are the lower end of the middle market based on revenue/earnings, you may attract quite a bit of interest from the PE community, especially any firms that are active in your particular industry.
The challenge you may face is that unless you have a subscription to Capital IQ, or one of the other deal tracking databases, you will have a challenge in finding this information. This is one of the reasons Generational Equity has been so successful over the years for those planning to sell their business. Our proprietary database contains over 34K registered buyers, many of them PE firms that have told us exactly what types of companies they are looking for.
Your company may be one of those matches.
If you look through our list of completed transactions (and we just closed our 1,000 deal in April) you will see a number of PE firms that we have sold companies to. In fact, so far this year nearly 40% of all our deals were acquired by PE backed companies, family offices, or PE firms directly. You can review a sampling of closed deals here:
To find out more about PE activity, please reach out to one of our Senior Business Advisors who will be able to walk you through how you can gain more knowledge not just about PE firms as buyers, but all buyer types. Our number is 972-232-1121, or you can visit our website to leave us your confidential contact info and we will be in touch.
And remember, as you approach buyers with your company, be sure to include active PE firms in your industry on that list!
Carl Doerksen is the Director of Corporate Development at Generational Equity.
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