These Lenders Are Making A Growing Number of LBOs Possible
- Recurring revenue loans let PE pursue later-stage startups
- Private LBO loans can lead to higher debt financing levels
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Private equity firms are finding that more leveraged buyouts of tech companies are becoming possible, thanks to lenders that have deeper pockets than ever: private credit firms.
These lenders are providing financing to companies that wouldn’t be able to borrow as much in bond or leveraged loan markets. Private credit firms’ willingness to finance these kinds of deals is helping to fuel the highest volume of LBOs for tech companies since 2016. And they’ve enlarged the universe of publicly traded U.S. corporations that private equity firms can readily buy by somewhere around $550 billion.