Can't Sell The Whole Enchilada? Just Sell A Bite
There have been plenty of busted auctions this year, with buyer and seller expectations set miles apart. That's bad news for PE shops in search of exits, but some firms are getting creative by using partial exits (i.e., selling a minority stake). It's simple. You scour your debt agreements and find out how much you can sell without triggering a change of control clause. Then sell exactly that much, in cash, to another private equity firm. It should be a small enough chunk that at least someone can afford to bridge it. The capital structure stays in place, you gain liquidity and your buyer gets an attractively priced stake in a company with a pre-credit crunch capital structure already in place. It's a way to rustle up some liquidity, which you could return to LPs, use to pay down debt, or help an ailing company make it through the downturn. Several sources have told me they're seeing books circulate for the
