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Exit Strategies for PE Investors

OfficeHours

For private equity investors, one of the most important considerations for a successful investment is determining the value the firm will receive at exit, which directly impacts fund returns. Private equity investors often have a 5 to 7-year investment horizon and expect a significant return at the end of this hold period.

Investors 100
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Arm, the Chip Designer, Files for an I.P.O. Expected to Be Among the Largest

The New York Times: Mergers, Acquisitions and Dive

filing means Arm can begin to gauge investor interest, which will be critical to the share sale.

Sale 92
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Women founders lose more when selling equity stakes

Growth Business

Exits – the sale of a majority stake or an initial public offering – by female owners sustained its increase in 2022, rising to 171 compared with 147 in the previous year. What’s more, female-led businesses also raised £5.75bn from private equity investors last year in 2,097 deals.

Equities 100
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M&A Blog #12 – sell-side acquisition (preparation)

Francine Way

Many of these causes have their equivalences to the reasons behind the sale of a company (also known as a divestiture): Liquidity: As the equity holding period matured, investors (private equity funds behind companies) will look to sell. Once a sale has been decided, the process to look for a new owner is pretty well established.

M&A 130
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Why learning the LBO model trains you for the PE or Debt fund infusion analysis/models?

Wizenius

2) Unleashing Returns Every LBO model is underpinned by the drive to generate lucrative returns for investors. In an LBO scenario, both debt and equity investors commit capital to the target company. Within an LBO framework, investors aim to boost returns by leveraging debt to magnify equity returns.

Debt 52
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Building a Solid Foundation: Essential Steps for Paper LBO Practice

OfficeHours

Typically, you should ask for capital expenditures and net working capital upfront, which are aspects of a business that investors typically prioritize in order to enhance cash flow as they fuel revenue growth initiatives. Focus on Cash Flow Generation Sustainable cash flow generation is the lifeblood of any LBO.

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Is Private Equity Right for You?

OfficeHours

As further discussed below, private equity firms raise funds from institutional investors and use these funds to acquire ownership stakes in businesses. Once improved, the exit can then take place, usually in the form of another sale or an Initial Public Offering (IPO), both of which are usually under the advice of an investment bank.