Private equity firms are now competing for deals in sectors that were historically dominated by strategic buyers. Changing business models and industry dynamics have helped pave the way for financial sponsors to out-buy their corporate competitors in regulated markets such as media.
"It has become the case that some PE firms that have bought into media now bring to the table the same regulatory issues as strategics. But most PE buyers in regulated industries still have an advantage over strategics in that they by and large are not saddled with regulatory shackles, so they offer more certainty of closing," said Scott Falk, a partner at Kirkland & Ellis in Chicago. "If bids from a strategic and financial buyer were similar, a company probably would sell to the bidder that doesn't have regulatory issues."
This article appeared in its entirety in the April 1, 2007 edition of the Mergers and Acquisitions Journal.