Private Equity Firms Have $1.5 Trillion to Spend, But Are Struggling to Seal Deals

Private equity firms hunting for acquisitions with their $1.5 trillion of unspent capital are struggling to seal deals as they hit roadblocks from heady price demands to difficult financing markets.

Buyout funds have seen around $30 billion of potential deals hit trouble in recent weeks. Medtronic Plc is looking increasingly likely to spin off of its patient-monitoring and respiratory-intervention operations, after talks with Carlyle Group Inc. slowed and strategic bidders’ interest cooled, people with knowledge of the matter said. It was seeking a valuation approaching $10 billion, they said.

Dentsply Sirona Inc.’s potential $1 billion sale of medical product unit Wellspect HealthCare is stalling after private equity bids didn’t meet expectations, the people said. Meanwhile, Cardinal Health Inc. said last week it’s holding onto its $2 billion nuclear medicine unit, which had drawn bids from CapVest Ltd. and HIG Capital.

These days, price expectations need to be bridged and potential buyers are spending more time on due diligence, said Carsten Woehrn, JPMorgan Chase & Co.’s head of financial sponsors mergers and acquisitions for Europe, the Middle East and Africa.

Source from: Bloomberg