One of the last big deals that surfaced BEFORE the credit crunch was the takeover by KKR of Boots. This was the first time I personally had come across the terms 'mezzanine capital' and 'mezzanine debt'.
During bull markets over the years mergers and takeovers are driven, usually, by a takeover by a company in a similar sector. For example, GE Healthcare taking over Amersham, Shell Oil taking over Enterprise Oil... etc.
Pre credit crunch private equity became a common and in some cases a welcome addition for investors. If a company was undervalued then private equity would release the value of a company by taking it over and returning value to shareholders (and ultimately themselves). Some would argue, as possibly in the case of Debenhams, that asset stripping went too far and left very little reason to reinvest as the company was refloated.
So, will the return of private equity companies depend on a resurgence in the long-term bull market and most importantly, the availability of being able to borrow those all important billions of pounds/dollars?
ArtNouveau
