Change is in the air for private equity (PE) firms, which closed record-setting numbers of merger and acquisition transactions in 2021 and early 2022. It’s been smooth sailing for PE firms for several years – explosive fundraising, returns that regularly outpaced those achieved in the public markets, easy access to debt financing, and low interest rates. But since mid-2022, waters have gotten choppy. Whether you are in the recession or “slowcession” camp, the economy has entered a slowdown and as a result deal volume is dropping, as are overall valuations for M&A; sellers.

In the macro workplace, there is stiff competition as an expanding number of PE firms have a record level of dry powder. A PwC analysis[1] finds that the number of funds raising over $500 million nearly tripled from 37 in 2011 to 104 by 2021. And, according to PitchBook[2], PE firms had $1.2 trillion of dry powder in August 2022 (down from $1.5 trillion in 2020).

However, when it comes to investing all that capital there are significant headwinds and uncertainty,



including ongoing supply chain issues and the war in Ukraine. Less willing lenders, rising interest rates and low unemployment levels present challenges to companies across the U.S. And PE firms, having become a considerable presence in the economy, are getting significant pressure to invest and create value in their portfolio companies via environmental, social and governance strategies.

M&A; Deals and Private Equity

What Are The Ramifications For Business Sellers? As a General Comment, It Is a More Arduous Process To Get a PE Deal Done Today Than It Might Have Been a Few Months Or Years Ago, But M&A; Transactions Are Closing. There Are Several Trends Worth Considering

Deal types – as bank financing becomes more costly and increasingly difficult to obtain, there are fewer all-cash leveraged buyouts; instead, add-ons, divestments, and public-to-private deals are increasingly common
Deal structure – with less cash available up front, b

📌 M&A Deals and Private Equity in 2023 (India)
🏢 Linden Law Partners
📍 India