Private Equity | Street Talk | Dix & Eaton

Thinking Ahead

As you know, I do talk to myself about what’s around the corner at the intersection of Investor Relations and the Capital Markets. Lately, I’ve found myself asking a lot of questions… questions like:

1. Will there be an uptick in companies going private as some find the damage done over the past 20 months is just too much to repair?
2a. Just how much “deal inventory” is built up among private equity firms?
2b. If it is as much as I am hearing from folks, are we heading into the season of bolt-on acquisitions?
3. At the end of the day, what will the Dodd-Frank Bill mean for investors and IROs?
4. Why are folks seemingly folks more concerned with what dissemination channels are used than the IR messaging going into them?
5. If a particular strategy does not work for your shareholders, does it really matter if it’s a “best practice”?
6. Will recent events with BP and Toyota change the way Boards handle risk management?
7. Is the IPO market really coming back?
8. What does a double rainbow mean?

Have you been asking yourself any of these questions? If so, how do you find yourself answering them. If not, what have you been asking yourself?

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Private Equity v. Public Markets

I wanted to be sure you saw this Institutional Investor article on private-equity backed IPOs, which states - among other things - “PE deals have accounted for 40 percent of the total IPO-related proceeds this year since these are typically larger deals.”  According to some banking contacts of mine, the number PE-led IPOs should continue to increase in the near term as such offerings will offer a superior valuation to that provided by a private transaction with another PE firm.

This got me thinking… if there will be less deals between PE firms, does this mean that PE firms will be adding to their portfolio by taking more companies private than they have in the recent past? And, of those companies that have PE firms as their largest shareholders post-IPO, what kind of unique challenges will this place on management from an investor relations standpoint?

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