Private equity: The rise of quick flips

Author: | Published: 1 Dec 2006

Today, the life of many companies changes very quickly, often as a result of a close encounter with private equity. Not only are private equity firms buying more companies and bigger companies, they are flipping those investments, including by way of flotation, in shorter timeframes.

The success of private equity buyers is growing – they account for a significant proportion of all M&A activity and a recent Deloitte report indicated that private equity firms now have a 74% success rate in auctions, as compared to 30% in 2001. The largest public companies, once thought immune from takeover by virtue of their size, are now within the scope of private equity firms' ambitions (as illustrated by KKR's recent takeover approach to Vivendi for a supposed €40 billion), particularly those that successfully manage to pool their resources – although in this regard note the investigation by the US Department of Justice and...