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The Story: Recent PitchBook data reveals that private equity deal value has dropped by nearly 60% since last year. Despite the epic plummet there is one encouraging finding in the data—large-scale take-private deals have held quite strong this year.

At its 2022 peak, private equity deal value reached $138.8 billion dollars. So far this year, it sits just below $60 billion dollars. And there are many culprits: high interest rates, unsustainable and lofty company valuations, inability to raise capital, and economic uncertainty have put private markets through a brutal correction.

But take-private deals (transactions in which a publicly-traded company returns to private company status) have helped keep that $60 billion number from being a lot lower.

One of the most notable is Silver Lake’s and the Canada Pension Plan Investment Board’s take-private of customer experience management company Qualtrics for $12.5 billion. Blackstone also acquired software company Cvent for $4.6 billion, and Vista Equity Partners agreed to acquire EngageSmart for $4 billion. Those three deals alone make up more than a third of all private equity deal value so far in 2023.

With turbulent public markets this year, take-private deals look attractive for many enterprise software companies. And for growth and private equity firms who can acquire these at a discount, it's been a win-win for both.

The Expert Take: Brad Bernstein, managing partner at FTV Capital, thinks take-private deals are just getting started.

When asked if he sees the trend of take-private deals continuing into 2024, Bernstein responded “Absolutely.” He continued, “I think there is a lot of opportunity still with public technology software companies that went public in the peak of the market and lost the conviction of their initial shareholders… and many of these are exceptional companies that are not loving life in the public market and I think that’s going to create additional opportunities for companies to go back to the private market.”

Bernstein expects activity in private markets to pick up in 2024 as there will be more “dry powder” available that is interested in making take-private deals.

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