Do You Sell Your Company to Blackstone or Carlyle?

by on
in The Business of Business Finance

There are two types of buyers, good and bad.  Bad buyers don’t have experience, ability to listen well and lack funds to get a deal closed.  Good buyers are capable financially, compatible strategically, and focused on the better company they become through acquisition.

Another form of “good buyer” meets the first set of criteria, but chooses to focus on the value they create during the transaction, not after.  These buyers are more focused on price rather than value; they focus on how low they can negotiate a lower rather than how excited their new acquisition is to impact their bottom line.  Yes, I realize price is important, but at what cost?

We see this difference illustrated well in statements made by Tony James , President from Blackstone Group who lamented to analysts at the end of Q3 that “we’re routinely priced out of the market” and “its gotten a lot harder to find things of attractive value; we just can’t get to the prices required.”

His comments come on the heels of a very successful week for their competitor Carlyle Group who closed a $2.6 Billion deal to buy Syniverse Technologies and closed the $3.9 billion purchase of ComScope.  Rather than focus exclusively on price, Carlyle exec’s were more focused on the value they could create by helping both companies expand internationally.

Carlyle manages well over $90 Billion of client assets and has investments in over 400 companies across 19 countries.  They have grown to one of the most successful equity groups in the world because they choose to focus on how they can create new value in their portfolio companies, rather than an exclusive focus on requiring the lowest possible price.

So, here is an important question when you ultimately selling your business, would you rather sell to a Blackstone or a Carlyle?

Leave a Comment