Generally, there are many reasons for selling private equity companies to seek a second acquisition: for niche or smaller companies, it may not be possible to sell to strategic buyers and first public offering. The second acquisition may generate liquidity faster than other channels （ or the first public offering ）. Certain types of companies —— such as those with relatively slow growth but high cash flow —— may be more attractive to private equity companies than to public stock investors or other companies.
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Generally, if the investment has reached the age where it is necessary or desired to sell rather than hold the investment latest database further, or the investment has generated great value for the selling company, then the second acquisition is successful. [38] Secondary acquisitions are different from second-level or second-level market purchases, which usually involve the acquisition of private equity asset portfolios, including limited partnership equity and direct investment in company securities.
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If the company acquired in the second acquisition is sold to another financial sponsor, the resulting transaction is called the three acquisition. Failure Some BLB Directory leveraged acquisitions before 2000 have led to corporate bankruptcy, such as Robert Campeau’s acquisition of Federated Department Stores in 1988 and Revco Pharmacy in 1986. Many leveraged acquisitions during the boom period from 2005 to 2007 were also financed with excessive debt burden.