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Private equity: waiting for price expectations to align 

In an overheated and uncertain market, PE investors are becoming noticeably more cautious in expectation of a market adjustment in the coming months, bringing buyer and seller price expectations closer into line.

A marked feature of 2019 has been the number of processes that failed to cross the line because sellers could not find buyers willing to pay rising multiples, which are commonly peaking at between 12 and 15x.

However, big deals do get done in this environment. PAI’s acquisition of Armacell from Blackstone, Vista’s acquisition of Accelya, from Warburg and KKR’s sale of LGC Group to Cinven, Astorg and ADIA, are proof of that.

But investors are worried about the impact of macroeconomic issues on the underlying performance of target companies, and there is also a growing concern about increasing competition and valuations.

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Private equity investors are becoming noticeably more cautious in expectation of a market adjustment in the coming months, bringing buyer and seller price expectations closer into line.

In an overheated and uncertain market, PE investors are becoming noticeably more cautious in expectation of a market adjustment in the coming months, bringing buyer and seller price expectations closer into line.

A marked feature of 2019 has been the number of processes that failed to cross the line because sellers could not find buyers willing to pay rising multiples, which are commonly peaking at between 12 and 15x.

However, big deals do get done in this environment. PAI’s acquisition of Armacell from Blackstone, Vista’s acquisition of Accelya, from Warburg and KKR’s sale of LGC Group to Cinven, Astorg and ADIA, are proof of that.

But investors are worried about the impact of macroeconomic issues on the underlying performance of target companies, and there is also a growing concern about increasing competition and valuations.

In an overheated and uncertain market, PE investors are becoming noticeably more cautious in expectation of a market adjustment in the coming months, bringing buyer and seller price expectations closer into line.

A marked feature of 2019 has been the number of processes that failed to cross the line because sellers could not find buyers willing to pay rising multiples, which are commonly peaking at between 12 and 15x.

However, big deals do get done in this environment. PAI’s acquisition of Armacell from Blackstone, Vista’s acquisition of Accelya, from Warburg and KKR’s sale of LGC Group to Cinven, Astorg and ADIA, are proof of that.

But investors are worried about the impact of macroeconomic issues on the underlying performance of target companies, and there is also a growing concern about increasing competition and valuations.