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The Escalation of Buyouts and New Strategies

A recent Bloomberg Law analysis shows that the current crisis has disrupted some activities in PE’s usual business strategies but has also opened some new opportunities.

Two of the most interesting takeaways of the study are:

1. Buyouts are on the rise

Despite the financial difficulties, PE M&A market share and buyout volumes remain solid. In 2019, industry transactions accounted for 26% of all announced global M&A volume. This year PE represents roughly 30% of all global M&A volume.

The volume of PE buyouts is also increasing. In the US alone, there is $101.3bn in proposed, pending, and completed PE buyouts in 2020, a 15% rise from the same period in 2019.

2. New strategies are emerging

New changes may also signal a strategic shift by PE managers, who are increasing their purchase in additional stakes, compared to the same period in the previous year. Moreover, second and third round fundings are also up from last year. Bloomberg paints the present crisis as a chance for PE to emerge with an enhanced reputation, minimizing risk, and creating value.

Source: Bloomberg Law

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