The Pulse of Private Equity – 10/17/2016

Debt Usage in US M&A Remains Historically Low

Even as multiples remain stubbornly high across multiple sectors, debt usage remains low. This is primarily the result of a confluence of factors, including stricter regulations, cash-rich buyers and a general trend toward buying and building as a strategy on the part of private equity investors. In that last case, PE firms aren’t relying as much on financial engineering as they used to, looking instead to deploying more equity in deals to avoid overburdening portfolio companies with barely serviceable debt loads. Of course, that necessitates shrewd operational enhancements…