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Run for the Exits: Multi-Process Exit Transactions in Private Equity

January 28, 2021 (1 min read)

When a private equity fund or other owner of a private business undertakes an exit transaction, it does so after much planning and preparation. An exit transaction is a dramatic event in the life of a business, and the controlling shareholder(s), the board, and management should carefully consider their alternatives in terms of expected value and ease of execution.

In many cases, fund sponsors anxious to get payments out to limited partners go a step further and work in earnest on multiple types of exit transactions simultaneously in an effort to preserve their optionality and maximize their ability to react to changes in the market. For instance, a seller may engage in negotiations with a third party regarding a sale of the business, while at the same time preparing documents needed to make an initial public offering. This practice note outlines certain important aspects of multi-process transactions that may bear on the specific strategy that an investment manager looking to exit a portfolio investment might ultimately decide to pursue.

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