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Bailey McCann, Opalesque New York: The fourth quarter is capping off a tough year for private equity and venture capital. Data from S&P Global shows that the number of terminated deals ticked up in the fourth quarter, and the number of private equity-backed companies that filed for bankruptcy also increased in 2022.
About 10.5% of all terminated deals by volume based on data collected through Dec. 15 involved a private-equity backed company. Of the $192.21 billion worth of terminated M&A deals in 2022 through Dec. 15, private equity was involved in deals with an announced value of $66.29 billion, or about 34.5% of the total, data from S&P Global shows. Broken deals had been on a fairly steady decline, but changing market conditions have had an impact.
Bankruptcies are also on the rise. Forty-nine private equity portfolio companies have filed for bankruptcy in 2022, representing 6.6% of total filings in the U.S., according to S&P Global Market Intelligence data as of Dec. 9. This compares with 42 portfolio companies that filed the previous year, representing 3.5% of the total.
The majority of filers are going into restructuring, which could indicate some underlying strength in companies - especially if those restructurings are successful.
The two sectors hit the hardest were consumer companies and healthcare companies. Companies in both sectors are s...................... To view our full article Click here
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