The rise of public to private transactions

The interest of private equity investors in public companies has been on the rise over recent times with a doubling in transaction levels over the last year from 13 to 28 completed deals. Of course the public to private (“PTP”) is nothing new and has been around for many years with waves of activity levels. Throughout those years however most takeovers were still led by strategic buyers. Last year was different in that nearly half of takeovers were PTP deals. That trend looked set to continue into 2020 until COVID-19 had a big dampening impact on takeovers and M&A in general.

COVID-19 also caused capital market valuations to be hit hard with a 20% fall in March making many public companies look more attractive in value terms. At the same time it may well prompt management teams to again assess the merits of remaining publicly traded. Private equity investors meanwhile naturally turned to consider the impact of COVID-19 on their existing portfolio companies. Once those assessments have been completed and capital earmarked where needed, investors thoughts will turn to their pipeline. Public companies with their ease of research are likely to continue to figure prominently in their sights.

We have undertaken detailed research into PTP deals and published a report looking at the trends and the drivers, how these transactions work and our deal experience. The report has been shared with BDO’s private equity contacts but opportunities can also arise from personal connections of someone in BDO with a plc director or a legal contact.

We would like to hear from you about the report, if you want to get in touch or provide feedback, please contact John Stephan.

READ OUR REPORT