Exit options for BIG LBOssss
When PE firms do mega buyouts - like taking a public company private for 10-20 Bn - what is the realistic exit strategy they would have in mind? Would it be that they’d IPO? Let’s assume that they want to sell down entire stake in 5 years. Div recap gives you the money but still leaves you with ownership. And hard to envision a strategic buyer / financial buyer buying something for 20-30 bn that was just sold off a few yearS ago for 10bn...how do mega cap buy outs end??! Would love to hear examples.
Refinitiv is a good recent example - carved out of Thomson Reuters by BX in 2018, announced strategic sale to LSE last summer.
Generally speaking, public-to-private LBOs of those size don't usually work out well from an IRR standpoint. But once you work in PE long enough, you'll realize quickly PE is not about hitting home runs on every deal as it is about keeping the music going on fundraising, and a big driver of fundraising is putting cash to work. This is particularly the case when you're at a megafund.