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It's Official: PE Groups Are the New Kings of the M&A Hill
According to a survey sponsored by Barclays Private Equity, so far this year private equity firms have accounted for more than half of all English M&A activity, for the first time eclipsing trade buyers.
The survey further found that “secondary” buyouts -- deals where one PE group buys from another -- are also on the rise, now accounting for 40% of all deals versus 5% five years back.
In an extreme version of this gambit, last month Gala Bingo, a gaming operator with 166 “clubs” throughout the UK, was passed to its fifth PE owner. Some PE groups are even buying back companies they previously owned.
We wonder how investors with positions in multiple PE groups benefit from deals that simply move buyout targets from one portfolio to another at ever higher prices. Makes you wonder who’s out of a chair when the music stops.
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