TO SAY THAT the LBO market experienced a boom in the mid-2000s is akin to saying that the sub-prime mortgage market triggered a slight wobble in the financial system thereafter. Roughly a half of all private equity that has ever been invested was put into the market in that 30-month period. That shocking figure describes a frenzy of LBO activity, the long-term consequences of which will not be known for many years to come. Those in the industry might argue that the wisdom or otherwise of these transactions should not be judged until the investment periods are up – a simple ebitda-in, ebitda-out analysis.
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