During the private equity boom years, one of the most common criticisms of the private equity kingpins went like this: "All they do is buy companies at a discount, leverage up the balance sheet, and use the cash flow to pay off the debt -- extracting millions in fees in the process."

Well now that access to cheap, covenant-lite debt has dried up, buyout shops are turning to the other option for making money: operational improvements. A new white paper released by Grant Thornton and the Association for Corporate Growth -- admittedly a private equity trade group -- found that 42% of private equity firms are devoting between 51% and 75% of their time on the management of companies they already control.

Continue reading Private equity firms actually do try to improve portfolio companies

Private equity firms actually do try to improve portfolio companies originally appeared on BloggingStocks on Sun, 26 Jul 2009 14:40:00 EST. Please see our terms for use of feeds.

While mega-deals made possible by cheap credit and lots of leverage may be a thing of the past, a biannual survey of M&A activity by the Association for Public Growth (ACG) and Thomson Reuters shows that dealmaking is expected to pick up, and even thrive in certain sectors, in the second half of 2009, according to BusinessWeek. An ACG spokesperson described dealmakers as "cautiously optimistic."

The recession has put company prices in the bargain basement -- buyout targets are suddenly affordable. Those buyers with cash in hand are expected to begin scooping up bargains. Private equity firms are eyeing bankruptcy courts, on the lookout for distressed and busted companies, such as Polaroid and Stila Cosmetics, were snapped up recently.

Continue reading Dealmaking expected to increase in second half of 2009

Dealmaking expected to increase in second half of 2009 originally appeared on BloggingStocks on Wed, 13 May 2009 18:40:00 EST. Please see our terms for use of feeds.