Global private equity take-private deals totaled $18.57 billion from April through June 21, down 82% compared with the full 2022 second quarter, Preqin Ltd. data shows.

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Deteriorating financing conditions

While financial market turbulence has created an attractive environment for take-privates, arranging deal financing is a challenge.

"It is important to note that these deals tend to be larger in scale and require more intricate financing arrangements. Unfortunately, we have seen a deterioration in deal financing conditions due to the uncertain macro-economic environment and interest rate outlook," Preqin's head of private equity research insights, Cameron Joyce, told S&P Global Market Intelligence.

Improved financing conditions could emerge once markets start to perceive that the rate tightening cycle has concluded, alleviating some of the uncertainty for financing markets, Joyce added.

Largest deals

In the year to June 21, global transaction value was approximately $75.88 billion across 38 deals. Average deal value was about $2.00 billion compared to approximately $2.89 billion in full year 2022.

The top 10 deals so far this year represent $66.32 billion, or about 87% of aggregate global value. The largest of these is the proposed acquisition of Japanese industrial conglomerate Toshiba Corp. for approximately $14.82 billion by a group of investors including Japan Industrial Partners Inc.

The second largest was Silver Lake Technology Management LLC and Canada Pension Plan Investment Board's $12.50 billion privatization deal for US application software company Qualtrics International Inc.

As a proportion of overall private equity deals, take-privates comprised 21% in 2022 and account for 23% of all deals so far in 2023, Preqin data shows.

Thoma Bravo LP emerged as the most active fund manager in take-private transactions in 2022, with involvement in 10 transactions, followed by KKR & Co. Inc. with four deals.