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Laxman Pai, Opalesque Asia:

A report by S&P Global Market Intelligence said that the rise of private credit is powering a surge of private equity-backed take-private transactions that began when public market valuations dipped in 2022.

Its report quoted research and consulting firm EY saying that take-privates typically account for about 20% of private equity deal value, but that share doubled to about 40% in 2023.

According to Pete Witte, global private equity lead analyst for EY, in less than three months into 2023, take-privates accounted for 70% of the year's private equity deal value.

One factor is the broad decline in the value of public market companies, which have private equity hunting for deals. The S&P 500 fell 18.11% in 2022 amid surging inflation, rising interest rates, and a more uncertain global economic outlook.

Another driver for take-privates is the growing prominence of private credit in private equity dealmaking in response to tighter lending standards from banks, Pete was quoted as saying.

"Consortiums of private lenders are coming together in ways that we haven't really seen before to finance some of these larger deals ... even in the absence of traditional sources of financing," Pete said.

The S&P report also quoted the law firm Debevoise & Plimpton saying that one key ingredient in many of those consortiums is a "legacy sponsor" who already has a financing agreement in place with the target of the take-p......................

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