Private equity sales of portfolio companies to corporations could reach $264.4 billion by year-end, the total value of all of private equity exits in 2014, if predictions by PitchBook Data Inc. are right.
Overall, private equity firms completed 478 domestic exits in the first half of this year amounting to a total of $185 billion, with 228 deals worth a total of $119 billion in the second quarter alone.
By comparison, private equity firms completed 1,072 exits totaling $264 billion in all of 2014, data from the Seattle-based research firm show.
The majority of the exits in the first two quarters of this year were from sales of portfolio companies to corporations known as “strategic sales” totaled $160 billion in the first half of 2015, with $103 billion in just the second quarter, compared with $167 billion in strategic sales for all of last year, PitchBook's recently released Third Quarter U.S. P.E Breakdown Report states.
Corporations are in an expansion phase, which is fueling a boom in mergers and acquisitions, and providing exits for private equity firms.
Nevertheless, the private equity investment-to-exit ratio hit 1.7x in the first half of 2015 — 1.7 investments for every exit — the lowest in a decade.
In 2014 the investment-to-exit ratio was 1.9x and in 2013, 2.0x.