Private Equity Secondary Buyouts

Private Equity (PE) secondary buyouts are often used as exiting strategy for investment besides initial public offerings (IPOs) or acquisitions and also considered as panic sales. In Secondary buy-outs (SBO) a Target which is owned by a PE provider and management is acquired by another PE provider. There has been marked increase in SBOs globally since 2009 as they have become second most prevalent technique of equity firms to sell in order to re-invest or deploy capital which is on the brink of expiry. The maturing of SBOs activities has also improved PE market. This can be evidenced by the fact that there were 291 secondary buyouts globally in 2006, valued at an aggregate USD 72 billion (bn), while in 2014 there were 501 secondary buyouts, the highest number on record, valued at USD 93bn.