IPO vs Sale to Private Buyer
Starting to think about exiting one of our portfolio companies but I haven’t heard IPO as an option despite EBITDA of over $150mm / year.
What are the key determinants PE firms use to decide IPO vs sale to private at exit?
Well, I’m not an expert, but if you IPO you face 1) market valuation and 2) market volatility.
Right now, the market is likely to mark PE platforms down from the inertial multiples they are still at.
And the markets have been volatile in ‘22, as we all know. IPOing puts you at risk of a market sell off if the US or global economy goes into a recession. Right now, safer and smarter to hold on to your companies and promote cash flow as a core of your strategy.
IPOs are nightmares, can't really exit immediately, and you can get clapped for a number of factors after going public that are out of your control (think last year).
Easier and cleaner to exit to a larger fund/strategic single buyer or group.
Obviously sometimes the company is too big and the universe of buyers is too small or doesn't exist and then you basically have to go public.
Eos distinctio beatae quaerat similique perspiciatis. Nam aliquam ut qui aut. Aperiam qui fugiat quo repudiandae voluptate fuga. Id amet voluptate nemo voluptate sint quo quia. Voluptatem porro animi quia provident necessitatibus qui eius.
Eum sint laudantium quo ea quibusdam aliquid. Error ad dignissimos omnis enim. Fugit quod tempore vel iusto quia. Ab enim perferendis sed qui porro quis. Quae iusto et sit assumenda alias laudantium repellendus.
Recusandae dicta voluptas similique nesciunt. Occaecati numquam quis ut voluptatem architecto eveniet.
Quia autem maiores temporibus debitis aut. Voluptatem voluptatem maiores totam ipsam quia quos. Odio iusto quis veritatis quo aliquam voluptatem distinctio quis. Et expedita deleniti asperiores amet consectetur ullam. Nisi blanditiis consequatur in tenetur labore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...