With private equity investors of all types flush with cash -- from venture capitalists and hedge funds to large leveraged buyout (LBO) firms such as The Blackstone Group and The Carlyle Group -- private financing hit record levels in 2006 and is likely to remain strong in the new year, according to Wharton faculty and industry analysts. Nearly a third of the dollar value of all U.S. acquisitions last year involved private equity firms, up from just 3% five years ago, according to U.K.-based Dealogic, which tracks the investment industry.
General Electric reportedly has invited private equity firms to bid for its plastic divisions in a deal that could be worth more than $10 billion. The nation's largest casino operator, Harrah's Entertainment, is weighing a $15.5 billion bid from a team of private equity players. In November, shareholders of hospital company HCA approved a $33 billion private-equity buyout, topping the prior record of $31.3 billion paid for RJR Nabisco in 1989. The RJR Nabisco deal, chronicled in The Barbarians at the Gate, has come to symbolize the 1980s buyout era that ended with the crash of highly visible junk bond deals.
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