Companies that release and produce alternative music. more »
Theaters exhibiting independent, foreign, classic, documentary, cult and mainstream films. more »
Providers of book production services. more »
Quickly find online providers of Walt Disney World tickets, including Disney World Magic Kingdom tickets and Disney World Resort tickets. Review our business listings for links to … more »
Distributors of films, including international films and documentary films. more »
Reach active buyers and immediately increase your visibility
Get StartedResearch and reference materials containing information on film production. more »
Private equity firms invest in non-public companies and typically hold their investments with the intent of realizing a return within 3 to 7 years. Generally, investments are realized through an initial public offering, sale, merger, or recapitalization.
Private equity groups tend to focus on more mature businesses, often contributing both equity and debt (or some hybrid) to the transaction.
What do private equity firms look for in a potential acquisition?
CREATING VALUE
While private equity firms employ various strategies to create value in their investments (such as the consolidation of a fragmented industry), a common strategy is to acquire a "platform" company and grow the platform through further "add-on" acquisitions. Add-on acquisitions are typically smaller in size, but complementary to, the platform investment.
LEVERAGE AND CASH FLOW
Private equity groups typically use leverage (debt) to increase the return on the firm's invested capital. The amount of leverage employed is normally determined by the target's ability to service the debt with cash generated through operations.
EXIT
Private equity groups make money from both the cash flow of the acquired business and from the proceeds generated upon exiting the business. The exit provides the investor a mechanism to monetize the firm's equity. The exit provides the financial sponsor with a finalization of the investment and an opportunity to distribute profits. In fact, a significant component of a private equity professional's compensation is based on this profit distribution, called "carried interest".
The private equity marketplace refers to the equity in companies that are not involved in the public trading within a stock exchange. When firms invest in this type of marketplace, there is usually an initial period where the investments are established through an initial merger, public offering, recapitalization or sale. As a company that invests in this marketplace, expect to receive your return between three and seven years.
By investing in private equity, you are contributing to the entrepreneurial marketplace. This is because it is estimated that the capital from private investors accounts for 20 to 60 billion dollars of the total amount each year. This is 30 to 40 times more than the venture capital industry as a whole.
To receive investments as a business that is a part of the marketplace, most firms want to ensure that you have a strong management team, the ability to create and maintain value, a significant potential of growth and an exit strategy that is clearly defined. Your company must be able to generate cash flow in order to gain trust from potential investors. There are resources available online to assist with obtaining more information on entering the marketplace.
For more information on the private equity marketplace, refer to the links on this Business.com page.
