The Wind-up and the PitchBook

PitchBook Data, a private equity-focused research firm, has released a new set of data analyzing U.S. private equity activity through the 3rd quarter.  Let’s look at a few highlights:

Year-to-date deal volume was down 60% compared to the first 3 quarters of 2008.

The 3rd quarter had fewer deals close (201 transactions) than either the 1st (249) or 2nd (214) quarters, and average deal size was also smaller.  Of course it takes time to get to closing, so most of these were probably initiated in Q4 2008 or Q1 2009.

Distressed investing continues to be in vogue, accounting for about 5% of all PE deals in 2009 as compared to about 2% historically.  So far in 2009, PE firms have acquired over 25 bankrupt companies, and another 16 similar deals have been announced.

61 funds raised over $98 billion in new private equtiy capital commitments during the first 3 quarters of 2009.  There is still almost $400 billion in unspent capital available to PE firms.

This last statistic is perhaps the most important.  $400 billion is still a lot of dough, and the primary way PE firms’ managers justify their existence is by putting this to work acquiring more companies.

Here at Arena Capital Advisors, we’ve been hearing from quite a few PE firms since Q2, all looking for new deals and/or add-on acquisitions for their existing portfolio companies.

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