US PE exits reach five-year high in 2014

The US M&A boom in 2014 has not be confined to corporates. Their PE counterparts have also taken full advantage of the rebound.

White & Case’s new report reveals how PE exits have added to the M&A boom

Private equity (PE) firms took full advantage of the US M&A rebound in 2014, seizing the opportunity to exit more portfolio companies than at any time since the bottom of the market in 2009. PE investors sold 962 companies worth US$261.8 billion last year, an increase of 31% YoY in volume and 70% YoY in value. Indeed, exit values were five times higher in 2014 than they were in 2009.

A number of factors spurred this run of private equity exits, including: stronger portfolio company performance, the return of well-funded strategic buyers to M&A markets, and a robust auction market. But perhaps most importantly, buyers, both strategic and financial, were willing to pay premiums for assets. The downside of this seller-friendly market is that it has been more difficult for PE firms to purchase companies at attractive prices.