E&Y: Corporates failing to look at PE as potential buyer

Trade players are more likely to look at domestic and foreign buyers operating in the same sector (34% and 29% respectively), or even at other corporates in different sectors (19% domestic, 13% foreign).

While acknowledging that targeting private equity buyers requires a different approach in terms of preparation, Ernst & Young commented that "sellers may be missing an opportunity to secure capital by not taking the time to prepare for these potential buyers, who may have significant amounts of capital to deploy."

According to the study, 77% of respondents intend to accelerate their divestment plans over the next two years. Nearly half (46%) are already in the process of divesting or are planning to divest within the next two years.

Private equity could notably be missing out at the upper end of the market, where large-cap buyout opportunities are already scarce: nearly half (47%) of the respondents were businesses with annual revenues in excess of $1bn.

The full 2012 Global Corporate Divestment Study is available here.

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• Ernst & Young
• Large-cap buyout