Despite yawning gaps in bid/ask prices and tight credit, private equity firms are getting deals done. In this edition of Inside The Deal, Jones Day partner Brette Simon says they are employing a handful of innovative deal structures to do so.
For one, Simon is seeing the rise of what she calls EBOs -- equity buyouts -- with an eye toward restructuring in 12 to 18 months.
"What PE firms are doing that's innovative is in lieu of senior debt, they'll provide it themselves and they'll structure it as a preferred instrument." That maintains the capital structure, she says, so that when the refinancing happens, the PE firm retains the ownership position it would have had if debt had been there from the beginning.
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Suzanne Stevens
