Lower Equity Contributions Fueling M&A Activity

March 19, 2013 10:38 by Stephanie Siders in Financing, M&A, Private Equity  //  Tags:   //   Comments (0)

Equity contributions in private equity-backed deals are trending lower as private equity buyers increase leverage with cheap debt, enabling them to write checks for a lower percentage of the entire deal.  Equity contributions in leveraged buyouts averaged 39.4% in 2012, the lowest level seen since 2007.  The combination of cheap debt, lower equity contributions, and continued high levels of dry powder bodes well for increased M&A activity and deal size.  

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