| |||||||||||
| |||||||||||
 Venture capital firms aren't the only ones eying the IPO market to start providing exits from their portfolio companies. While VCs have racked up six IPO exits this year, the only PE-backed company able to make that jump has been language software firm Rosetta Stone Inc. (NYSE:RST). However, with some signs of life in the IPO market, LBO firms are taking notice and "cautiously looking" at equity offering again, according to a Reuters story. Bankers and lawyers report a rise in the number of portfolio companies in their IPO pipelines and a increased level of talks with private-equity firms. "There's a slow snowball picking up," said Richard Truesdell, co-head of the global Capital Markets Group at law firm Davis Polk & Wardwell in New York. "We are miles away from the frenetic activity of 2007 but we are also hopefully miles away from the complete absence of IPOs that we had." While both private equity and venture investors would surely love to see the IPO become a reliable exit strategy once again, buyout shops do face some higher hurdles to making going public profitable. Unlike the typically leverage-free VC portfolio companies, PE-backed companies will often see any new money raised go toward paying down the huge debt loads most carry. Further complicating the race to profitability are the high valuations, LBO shops paid during the heyday of cheap debt. However, a resurgent IPO market may be the best bet for buyout firms to break even or profit on the 2005-2007 crop of companies as tight debt markets and reduced buyer appetite makes a profitable M&A exit a long shot. - George White
CategoriesPrivate capital video
Categories
Blog roll
Archives
| |||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
