It’s no secret that the PE industry has faced some rough waters in the past year. But why? Because macroeconomic conditions caused all sorts of turbulence. And it looks like we’re in for another challenging year. Leverage buy-outs become harder to come by, and banks struggle to sell off their hung debt. It’s likely that this trend will simmer on for the months to come.
However, there are some bright spots on the horizon. Luckily. According to @Pitchbook, PE firms will be on the lookout for companies with strong revenue visibility, mission-critical services, and excellent cash conversion. With dry powder levels on record levels and the number of add-on investments rising, one of the key questions is how deal opportunities will develop.
Instead of bluntly capturing synergies, PE firms are looking for smart integrations to value creation. Many of the leaders I spoke to, see 2023 as a continuation of the most challenging environments we have ever faced. And for good reason. But if last year taught us anything, it has never been more important to accelerate execution, create differentiation and build operational resilience. Those three factors are the building blocks to execute your integration plan smartly during the investment lifecycle.
