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Market insights related to go-private transactions

U.S. Going Private Premium Analysis

U.S. going private 2009 deal activity was very similar to CY 2008

  • Private equity activity lagging historical levels amid tight credit markets
  • Globally, 6.4% of announced deal value in 2009 involved a financial buyer

Depressed market tied to increased 2008 and 2009 go-private premiums

  • Premiums have increased from 32% in 2008 to 37.2% for 2009
  • Amid the challenging macroeconomic environment in 2009, the primary reasons given for going private transactions were to reduce compliance costs associated with being a public company
    • Companies believe they can improve margins by 100 to 200 basis points or more by eliminating public company compliance costs
    • Other reasons provided for going private include ill-liquid market for shares, reduce liability for officers and directors, simplify governance, refocus business on long-term goals, reduce compliance costs and lessen disclosure requirements

Source: Thomson Financial

 

Read more insights in DCF's latest Middle Market M&A News and Divestiture M&A News.

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