10+ hours of podcasts, in 5 minutes.
4 quotes from 2 episodes on Private Equity Spotlight, each with a timestamped link to the source.
Adrian Letts states that transaction processes frequently collapse from poor communication and unchecked assumptions. Buyers often read negative industry news and immediately assume the target company suffers the same fate.
Acquirers frequently read negative industry headlines and immediately treat the worst-case scenario as a factual outcome for the target company.
“I as a buyer might have read a headline around something of how it's gonna affect the industry, and I take that as fact in terms of how it's affecting the company that I'm buying rather than, 'Adrian, I read this headline. I'm seeing this commentary in the newspaper. How do you think that affects the business that you're selling to us?'”
From Why Principal Talks Rescue Stalled Private Equity Exits
Adrian Letts points out that broad changes in the world cause some transaction processes to fail.
“First and foremost, it's important to understand why it broke down. Sometimes processes break down because the world has changed.”
From Centerbridge and EQT on Why Blaming Macro for Busted Exits Fails
Measurable market share gains, solidified platform capabilities, and growing top-line revenue give sponsors a clear signal to initiate an exit process.
“When you can start to see momentum in a business where you've solidified the platform level capabilities, and you are starting to see that top line grow where you are winning volume, winning market share, and being much more competitive and the competitive intensity is coming through, that's a signal where you should start to think about, look, is this time for exit?”
From Why Selling at Peak Performance Destroys Private Equity Exits
Deal processes often collapse when parties second-guess each other and base decisions on unchecked assumptions regarding the reality of the business.
“I think oftentimes process breaks down because there isn't great communication, and people are second-guessing each other and making assumptions about things that may not necessarily be the reality…”
From Why Principal Talks Rescue Stalled Private Equity Exits
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