Key Takeaways

93% of respondents are at least somewhat likely to consider take-private deals in the next 12 months, but compared to last year those who responded “very likely” dropped significantly from 80% to 44% – perhaps due to the positive performance of the public markets.

  • The fervor for take-privates has been tempered this year, however activity in this area is expected to continue despite rising costs and risk.

Part of the story is that take-private deals have become more expensive – despite volatility, 2024 has been a strong one for most global stock markets, with exchanges in the U.S. up by more than 10% and most European and APAC markets also tracking higher.

The public to private market valuation differential is narrowing. That concentrates PE firms’ minds on the reality that take-private deals are much harder work, with greater execution risk and the potential for reputational or additional regulatory issues.” Chris Field, co-head of Dechert's private equity practice

However, Markus Bolsinger, co-head of Dechert's PE practice, expects at least some activity in this area to continue. “Much of the performance of the U.S. market has been down to the ‘Magnificent Seven’ technology companies, but many of the remaining 493 companies are still not performing strongly,” he points out. “So, while the very low hanging fruit may have been taken, there is still interest in taking attractively valued companies private.”

Indeed, despite the relative reticence of respondents about the likelihood of future take-privates, the number of deals in 2024 looks set to surpass 2023, and there have been several mega take-privates, particularly in the U.S. These include the recent club deal acquisition of Smartsheet, the project management software company, for which Vista Equity Partners and Blackstone paid US$8.4 billon.

It is also worth noting that every single respondent in this research is considering undertaking sustainability and environmental, social and governance (ESG) investment deals. While there has been much debate about ESG investment over the past year, particularly in the context of a backlash against this approach in the U.S., it’s clear that PE firms have no intention of walking away from this area. In the EMEA region, for example, PwC expects three-quarters of European funds to be ESG-themed by 2027.

Footnotes

The preceding article is an excerpt from the 2025 Global Private Equity Outlook report, an annual publication that uses qualitative and quantitative findings to look at current PE industry trends and views on where the market is heading in 2025.