Do private equity firms only acquire publicly-traded companies?
Private equity transactions take many forms. Private equity may involve the acquisition of a private company with the intent of providing its founders the capital necessary to take its performance to the next level. It may involve the acquisition of a division of a large company, with the purpose of offering the newly-independent business the management focus and resources needed to achieve a new mission. Or it may involve a “public to private” transaction in an effort to undertake improvements that would be difficult to achieve given the short-term earnings focus of the public markets. Most recently, public-to-private transactions have gained the most attention. These transactions offer a way of increasing the value of businesses by temporarily transferring ownership from millions of public shareholders to a much smaller number of private owners. Without the pressures from outside shareholders looking for short-term gains, owners and managers can focus in a laser-like way on what is r
