Grant Thornton/Pitchbook PE Exits Report

PitchBook &
Grant Thornton
Private Equity Exits Report
2012 Annual Edition

Sponsored by:

PitchBook
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Table Of Contents
Grant Thornton Introduction ................................................. 3
Private Equity Exits Overview ................................................ 4-9
Exit Trends by Year and Quarter ........................................ 4
Deals and Exits Trends and Portfolio Inventory ................ 5
Holding Period and Exits by Investment Year ................... 6
DPI Multiples ......................................................................... 7
Median Exit Value and Exit EBITDA Multiple ................... 8
Exits by Region and Industry .............................................. 9
Industry Focus ........................................................................ 10-12
Business Products & Services ............................................. 10
Consumer Products & Services .......................................... 10
Healthcare ............................................................................. 11
Information Technology ...................................................... 11
Financial Services ................................................................. 12
Energy .................................................................................... 12
Exit Type Focus ....................................................................... 13-16
Overview ............................................................................... 13
Strategic Acquisition ............................................................ 14
Secondary Buyouts .............................................................. 15
Initial Public Offering ........................................................... 16
Addendum .............................................................................. 17
Regions Defined by State .................................................... 17
Industries Defined by Sector .............................................. 17

COPYRIGHT © 2012 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or
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security. This material does not purport to contain all of the information that a prospective investor may wish to consider and
is not to be relied upon as such or used in substitution for the exercise of independent judgment.

2 Private Equity Exits - 2012 Annual Edition www.grantthornton.com
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Private Equity Exit Activity
As the U.S. economy continues on the slow road to improvement, everyone is looking for signs that can prove or disprove
the theory that the worst is behind us. When we launched our rst joint report with PitchBook on private equity exit activity
for the rst half of 2011, we were as eager as everyone else to dig into the data to see if we could nd an answer. As is often
the case, the resulting report raised more questions than it laid to rest, some of which we have tried to explore in this
second issue of the report while at the same time raising new and larger questions.

Looking at investment and exit activity for 2011, we can see a signi cant gap between the two, a gap that has been
growing over the past decade. As large amounts of capital owed into private equity before the global nancial crisis,
investment activity signi cantly increased, outpacing exits, and leading to a build-up of the inventory of private equity
portfolio companies. A large portion of this inventory represents the result of more capital invested by LP’s in private
equity, and therefore larger portfolios. Moreover, a signi cant portion of this inventory is aging beyond the normal holding
period and is threatening the ability to generate the targeted IRR on these investments.

The median holding period for private equity portfolio companies has grown signi cantly in recent years. For companies
exited in 2011, the median holding period was 4.81 years – 25% higher than for investments exited by the end of 2008. This
creates a great need for exit activity to increase. Interestingly, however, the record capital overhang has the potential to be
part of the solution in the form of secondary buyouts. If this were to happen, it wouldn’t change the overall inventory but
would improve the median hold period. In this report, we take a close look at the inventory levels of speci c industries to
see if we can determine which, if any, industries are hot, or if the number of exits in any given industry is merely
proportional to the overall inventory.

Of the several questions this report will raise and attempt to answer, perhaps the most telling will be if the current state of
the private equity industry is a temporary condition generated by the overall economic slowdown or a permanent shift to
which private equity funds will have to adapt.

Despite the many questions, what we know for certain from working on the development of this report is that data without
context can be misleading. The information within is meant to function as the jumping-o point, rather than the nal word,
in this investigation.

Steven E. Brady

National Managing Partner
Grant Thornton Transaction Advisory Services

The people in the independent rms of Grant Thornton International Ltd provide personalized attention and the highest quality
service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member rm of Grant Thornton
International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member rms
are not a worldwide partnership, as each member rm is a separate and distinct legal entity.
Grant Thornton LLP o ers private equity rms and their portfolio companies a broad array of services tailored to their individual
needs and goals. Our professionals are responsive and dedicated, with strong experience in audit, tax, transaction and other advisory
services. More importantly, we bring valuable ideas, insights, and an instinct for growth to help our private equity clients achieve their
objectives to build and realize exceptional value.



Private equity rms sold or took public 213 U.S. companies during the second half of 2011, bringing the past year’s total exit count to
420. The exit deal sizes and public o ering amounts totaled $104 billion in 2011, putting the year roughly even with 2010’s totals of 434
deals and $106 billion. 2011 also marked the fourth most active year for PE exit activity, behind only 2006, 2007 and 2010. In one key
trend, private equity investors picked up their exit activity in the second half of the year, the opposite of what was seen in private equity
investment activity, which declined by 20% during the second half. This trend bodes well for exit activity in 2012 as it shows that private
equity rms are actively sourcing and closing exit opportunities. In another positive trend for exits, private equity rms managed to
execute exits for companies in every industry and across all sizes. Additionally, the median exit valuation multiple hit a three-year high
and is not far from those seen during the mid-decade peak years. Increasing multiples are not only being driven by improving company
performances but also the demand in today’s M&A market from corporates, PE rms and, in some cases, the public markets.

While the level of exits is relatively strong compared with recent years, it is nothing compared with the level of exit activity we expect to
happen in order to reduce inventory over the next few years. Private equity rms have expended considerable e ort to try to reduce the
massive amounts of capital they raised over the past decade
but have not yet had the same success pro tably exiting their Exits by Year
investments. At some point, the fact that PE rms have made
12,526 investments since 2002 but realized only 3,399
investments is going to force a shift. There are many indicators
that point to 2012 potentially being when that shift will occur.
In addition to the trends noted above, there is the fact that
about 70% of private equity rm portfolios currently consist of
mature investments that are three or more years old.
Additionally, the capital gains tax rate is once again set to go up
at the end of the year, which, when combined with all of the
above trends and a hopefully stable economy, will potentially
cause an uptick in exit activity as it did in 2010. The following
pages of this report will explore these trends in further detail.
Source: PitchBook

Exits by Quarter

Source: PitchBook



U.S. Private Equity Investments and Exits

Source: PitchBook

The stark mismatch between private equity investment and exit activity has resulted in a large and potentially problematic buildup of
private equity portfolios. PE investors closed out 2011 with majority ownership of 5,968 U.S. companies, up from a total of 5,745 at the
end of 2010 and more than double what was held at the end of 2004. The issue here is not that there are a large number of companies
owned by PE rms – this is an expected result of the past decade’s incredible levels of capital raising and investment, but that many of
these investments are now due or past due for an exit. Seventy percent of the companies owned by PE rms represent investments that
are at least three years old and 40% have been held for more than ve years.

Private equity funds have a nite life of around 10 years and operate under the assumption of three- to ve-year investment hold times.
Exit activity will need to greatly accelerate if private equity rms intend to hold to these timelines. Time is ticking particularly for 940 of
the portfolio companies, which have now been held for seven or more years. The returning stability to the economy and markets just
may provide PE sellers with the environment and opportunities they need to begin to accelerate their exit activity.

U.S. Company Inventory

Source: PitchBook



Private Equity Investment Hold Time
Median Holding Period by Exit Year

Source: PitchBook

The median hold time chart above shows just how much the traditional assumption of a three- to ve-year hold period is coming under
pressure. For companies exited in 2011 the median hold time from initial investment to exit was 4.8 years (4 years, 9 months), the longest
in over a decade. 2011 also marked the fourth straight yearly increase in hold time from a low seen in 2007 of just 3.5 years. This does not
take into account any distributions or dividends paid out by the companies, which can prolong the hold time if they return a signi cant
amount of capital back to their owners.

With the average age of current private equity portfolio companies now at 4.7 years, it looks like the median holding period will break
the ve-year mark in 2012. Look for PE rms to continue their focus on exiting their longer held companies, seventy percent of 2011’s
exits were from companies held for four years or longer. The average time between initial investment and exit could even move well past
ve years for 2012’s exits considering there is currently more than two years’ worth of exits at 2011’s exit levels for just companies held
for seven years or longer.
2011 Exits by Year of Majority Investment
# of Companies

Source: PitchBook



Private Equity Investment Hold Time
DPI Multiple
The bottom line impact of the mismatch between exits and investments, the aging company inventory and longer hold times can be
found in private equity buyout fund returns. The most common measure of fund performance is IRR, a time- and capital-weighted
measure of the returns generated by PE funds. When holding a company for a longer time period without distributing any signi cant
capital to LPs, each year (or even day) that goes by eats into the potential IRR of that investment. In order to compensate, PE rms have
to sell the investment at an escalating price, lest they face the reality that the longer hold time has diminished its IRR. For example, to
earn a 25% IRR on a $100 million investment requires a sale price of $305 million in year ve versus $195 million in year three. This is why
the record hold time of almost ve years presents a challenge to the private equity funds and their investors who have grown
accustomed to very strong IRRs.
The chart below shows the other area of fund performance currently being a ected by the record level of mature investments–
distribution levels. Historically, PE funds have begun returning capital around years three or four, and then continued to do so over the
next few years as they exit their investments before hitting their end date at ten years. However, since the nancial crisis, this has
changed. The 2005 and 2006 vintages have been particularly impacted and show the most noticeable a ects. Despite being six years old
now, the median 2005 buyout fund has distributed just 30% (0.3x DPI) of its limited partners invested capital and only 24% of its current
value (1.24x TVPI). The ve-year old 2006 vintage is lower, with the median fund having distributed back only 14% (0.14x DPI) of its LPs
invested capital and returned just 12% of its value (1.14x TVPI). Looking back across several fund vintages, the typical fund will have
distributed back to LPs about 52% of their investment by year six, and 30% by year ve. Showing just how far behind these vintages are
in terms of distributions. Older funds are also being impacted, with the median vintage 2003 and 2004 (8 and 9 years old) fund still
having not returned their limited partners’ capital fully back and having only distributed about half of their value back to their limited
partners. This bottom line impact on fund returns has to at some point change and serves as yet another reason for the need for private
equity exit activity to accelerate over the coming years.

Fund Multiples by Vintage Year
Fund Multiples

Vintage Year
Source: PitchBook
Types of Multiples
DPI: Distributed Capital / Contributed Capital TVPI: (Distributed + Remaining Value) / Contributed Capital or DPI + RVPI
This is used to calculate the cash-on-cash return for a fund. The ratio of the sum of the limited partners’ holding in the fund and
the capital they have received back from the general partner to the
capital they have paid in. This multiple is used to calculate the
RVPI: Remaining Value / Contributed Capital expected returns of a fund’s liquidation.
The ratio of the limited partners’ holdings in the fund to the amount
of capital they have paid in. This multiple is used to calculate how
much of a fund’s return is unrealized.



Median Exit Value and EBITDA Multiple
Median Exit Value ($M) by Exit Type

Source: PitchBook
This chart displays the median exit deal size for corporate acquisitions and secondary buyouts as well as the median o ering size for IPOs
of PE-backed U.S. companies. No clear trend emerges across all deal types except that, over the past two years, the exits have in general
been slightly larger than they were earlier in the decade. Looking closer at the di erent transaction types, however, there was a steady
increase in the median size for both corporate acquisitions and IPOs over the past few years. At the same time, secondary buyouts
trended the other way in 2011. When combined with the exit multiple chart below, it appears that the slightly larger median exit sizes
since 2009 are likely due to an increase in multiples. For secondary buyouts, though, the uctuation in median deal size is likely tied
closer to the size of the companies being bought and sold by PE rms.

Median Exit EBITDA Multiple

Source: PitchBook

The above chart looks at the median exit multiple (exit deal size / EBITDA) for all exit types over the last ten years. It shows a general trend
of increasing multiples until 2007 when the median peaks at 9.9x before dropping to 6.9x in 2009. Since then, multiples have been
recovering, growing rapidly. With a median multiple of 8.6x, 2011 has the fourth highest median multiple on record. 2011’s median
multiple was also above the median entrance investment multiple for seven out of the last ten years, meaning that, generally, rms that
in 2011 sold investments made during one of those seven years were likely able to realize at least some gain from EBITDA multiple
expansion.



2011 Exits by Region and Industry
2011 Exits by Region
Private equity exits were rather evenly dispersed in terms of
geography during 2011, with the exception of the Southwest
(de ned as Arizona and New Mexico), which represented only
1% of all exit activity. This low percentage corresponds with the
region’s overall limited inventory, which constitutes only 2% of
U.S. PE-backed company inventory. The Midwest led the pack
throughout the year, accounting for 22% of exits in 2011,
followed by the Southeast with 18%. Just as overall private
equity exit activity remained steady from 2010, there was little
change in exit activity by region between 2010 and 2011. The
most notable, however minimal, shifts were seen in the
Mountain and Northeast regions, which crept up by 2% and
1.5%, respectively. Conversely, the two regions that slipped in
2011 were the South and the Southeast, down by 4% and 3%,
respectively.

Source: PitchBook

2011 Exits by Industry
The Business Products & Services industry once again prevailed
in exit activity for 2011, followed by Consumer Products &
Services. Those industries had 141 and 91 exits respectively this
past year. Healthcare, for the rst time in a decade, inched past
Information Technology for the third spot, with 62 exits, just
one more than IT. In 2011, the percentage of exit activity per
sector directly correlated with the percentage of company
inventory within the industry; B2B companies accounted for
37% of industry inventory and, likewise, 34% of exit activity. On
the other end of the spectrum, Energy accounted for 5% of the
industry and was responsible for 6% of all exits.

The B2B industry was led by the Commercial Products sector,
which soared near 2007 highs with 69 exits, a 40% increase
from last year. Meanwhile, the Commercial Services sector
remained relatively steady from 2010, with 57 exits. In the B2C
space, exit activity was much more evenly spread, led by
Source: PitchBook
Consumer Durables with 20 exits and Consumer Non-Durables
with 23, a 36% decline from 2010.

In the remaining industries, there were pockets of
concentrated exit activity, such as the 31 exits from Healthcare
Services companies, 30 from Software companies and 14 from
Energy Services companies. The industries that saw the biggest
decline between 2010 and 2011 were Financial Services, with a
37% drop, and Materials & Resources, which slid 38%.



Industry Focus
Business Products & Services
The Business Products & Services (B2B) industry, which includes the Commercial Products, Commercial Services and Transportation
sectors, has led private equity exit activity since 2005, and 2011 was no di erent. This comes as no surprise, as historically the B2B
industry has consistently been the most active industry for private equity investment, and as a result, B2B companies account for 37% of
all companies owned by PE rms. In the past three years, the industry has seen 319 exits. There were 141 exits in 2011, which represented
a 19% increase from 2010 and totaled $24.9 billion in aggregate. One notable change last year was seen in the Commercial Products
sector, which soared past the Commercial Services sector for the rst time since 2008 to represent nearly half of all exit activity within the
B2B industry in 2011. Among the Commercial Products companies exited by PE rms during 2011 were Diversey, Consolidated Precision
Products and Bakercorp, all of which were sold during the second half of the year.

B2B Exits (Count) by Quarter B2B Exits by Sector

Commercial Products, 49%

Commercial Services, 40%

Transportation, 8%

Other B2B, 3%

Source: PitchBook Source: PitchBook

Consumer Products & Services
The Consumer Products & Services (B2C) industry, which includes the Apparel; Consumer Durables; Consumer Non-Durables; Media;
Restaurants, Hotels & Leisure; Retail; Transportation and Consumer Non-Financial Services sectors, saw a total of 244 exits over the past
three years. There were 91 exits in 2011, a decrease of 10% from 2010. Together, the exits in 2011 totaled $13.15 billion. Consumer
Non-Durables remained the most active sector within the B2C industry with 23 exits in 2011, almost half of which involved Food
Products companies. The sector, however, saw its share of B2C’s yearly exit activity drop from 36% in 2010 to 25% in 2011. Conversely,
Consumer Durables experienced a large increase in its share, rising nine percentage points to account for 22% of the 2011 activity. Sales
to strategics was the strategy used most frequently by PE investors when it came to exiting B2C investments last year, accounting for 47%
of the activity, signi cantly lower than its share of PE activity as a whole, 57%. Accordingly, secondary buyouts and IPOs both accounted
for higher percentages of the B2C activity (42% and 11%, respectively) than of PE activity in 2011 as a whole.

B2C Exits (Count) by Quarter B2C Exits by Sector
Consumer Non-Durables,
25%
Consumer Durables, 22%
Retail, 13%
Media, 12%
Restaurants, Hotels &
Leisure, 12%
Transportation, 11%
Apparel & Accessories, 4%
Services (Non-Financial), 1%




Industry Focus
Healthcare
The Healthcare industry, which includes the Devices & Supplies, Healthcare Technology Systems, Pharmaceuticals & Biotechnology and
Healthcare Services sectors, saw a total of 151 exits during the last three years, 62 of which were completed in 2011, up 9% from 2010.
With 31 exits, the most active sector in the Healthcare industry was Healthcare Services, which has maintained its lead since 2008. The
second most active was Devices & Supplies with 13 exits. However, it was the Healthcare Technology Systems sector that saw the
greatest increase in its share of the industry’s yearly exit ow from 2010 to 2011, jumping eight percentage points to account for 13% of
the 2011 activity. Overall, last year was the Healthcare industry’s most active year in a decade in terms of capital proceeds, which reached
$21.54 billion, the second highest amount of any industry within the private equity space in 2011. There are currently 329 Healthcare
companies that have been held by their PE investors for over three years, putting the industry on track for another good year for exits in
2012.
Healthcare Exits (Count) by Quarter Healthcare Exits by Sector

Healthcare Services, 50%

Devices & Supplies, 21%

Pharmaceuticals &
Biotechnology, 15%

Healthcare Technology
Systems, 14%


Information Technology
The Information Technology (IT) industry, which includes the Communications & Networking, IT Hardware, Semiconductors, IT Services
and Software sectors, saw 158 exits completed in the past three years. Exit activity within the IT industry held steady through 2011,
ending the year with 61 completed exits, enough to make the industry the fourth most active for private equity exits that year. IT’s 2011
exit activity was anchored by the Software sector. Software exit ow rose 40% from 2010, racking up 31 completed exits by the end of
the year. Other relatively active sectors in the industry were Communications & Networking and IT Services with 13 and 10 exits,
respectively. As for exit strategies, corporate acquisitions accounted for the large majority, 74%, of the IT exits last year. Meanwhile,
secondary buyouts and IPOs had shares of 23% and 3%, respectively. In all, the combined capital of the IT industry’s exits equaled $12.1
billion in 2011, a 38% decline from the previous year, which was the biggest drop-o in the private equity space.
IT Exits (Count) by Quarter IT Exits by Sector

Software, 49%

Services, 16%

Communications &
Networking, 21%

Hardware, 12%

Semiconductors, 2%




Industry Focus
Financial Services
Private equity rms completed 55 exits in the past three years in the Financial Services industry, which includes the Capital Markets &
Institutions, Commercial Banks and Insurance sectors. With only 17 completed transactions in 2011, a 37% decline from the previous
year, this industry was the least active for the second year running in terms of exit count. Nevertheless, Financial Services did see its best
year in 2011 since 2008 in terms of capital proceeds with $9.82 billion. Three of the largest Financial Services exits last year were the $6.3
billion sale of Chrysler Financial, the roughly $1 billion sale of Green Tree Servicing and the $783 million IPO of BankUnited Financial. Of
the 295 currently PE-backed companies within the Financial Services industry, 52.5%, or 155, have been held for 3 to 5 years, so 2012 has
the potential to be more active than recent years past.

Financial Services Exits (Count) by Quarter Financial Services Exits by Sector

Insurance, 23%

Capital Markets /
Institutions, 18%

Commercial Banks, 18%

Other Financial Services,
41%


Energy
The Energy industry, which includes the Equipment; Exploration, Production & Re ning; Energy Services and Utilities sectors, has seen
72 exits in the past three years. A total of 27 exits were completed in 2011, a 20% decrease from the previous year. The activity in 2011
was driven largely by the Energy Services sector, which saw 14 completed exits. Meanwhile, the Exploration, Production & Re ning
sector took the biggest hit last year in terms of exit activity with only 6 completed exits, a sharp 57% decline from 2010. The remaining
sectors maintained steady exit activity from 2010 to 2011. This lull in exit activity, however, did not inhibit capital proceeds for the year,
which totaled just over $16 billion. Contributing to this total were the $3 billion corporate acquisition of Dresser, the $2.9 billion IPO of
Kinder Morgan and the $1.3 billion secondary buyout of Houston Fuel Oil Terminal Company. Looking ahead, more than half (54%) of
the inventory within the Energy industry is between four and seven years old. With such a signi cant portion of portfolio companies
reaching maturity, there very well may be an uptick in exit activity within this industry in 2012.
Energy Exits (Count) by Quarter Energy Exits by Sector

Services, 52%

Exploration, Production
& Reﬁning, 22%

Equipment, 19%

Utilities, 7%




Exits by Type
Number of Exits by Exit Type

Source: PitchBook
The breakdown of private equity exits by exit type in 2011 was similar to that in 2010. Once again, strategics, or corporates, were the
most active buyers of private equity-backed companies, accounting for 57% of the exit activity last year, holding steady from 58% in
2010. The IPO strategy, on the other hand, continued to be the least-used strategy and even experienced a drop in its share of yearly exit
activity from 9% in 2010 to 7% in 2011. Meanwhile, secondary buyouts accounted for 36% of 2011’s exits, up from a 33% share of 2010’s.

PE Exit EBITDA Multiple by Exit Type

Source: PitchBook

The median exit valuation EBITDA multiple (exit valuation/EBITDA) for corporate acquisitions and secondary buyouts in 2011 was on par
with the respective multiples in 2010. Corporate acquisitions had a multiple of 8.7x and secondary buyouts of 9.6x last year, compared
with 8.5x and 9.4x in 2010. The multiple for IPOs, however, dropped to 5.1x in 2011 from 7.2x in 2010, a re ection of the challenges faced
by PE-backed companies trying to go public last year amidst market uncertainty, particularly during the second half of the year.



Strategic Acquisition
Number of Strategic Acquisitions of PE-Backed Companies

Source: PitchBook
With a 57% share of 2011’s exit activity, corporate acquisitions (sales to strategic buyers) continued to be the most popular avenue
among private equity investors for exiting portfolio companies. There were 240 corporate acquisitions of PE-backed companies last year,
just short of matching 2010’s 252 but enough to make 2011 the third most active year for corporate acquisitions on record. During 2011,
two of the largest corporate acquisitions were the sale of Chrysler Financial for $6.3 billion and Dresser for $3 billion. Private equity rms
held the companies sold in 2011 through corporate acquisition for a median of 4.8 years before selling, just over a month longer than
companies similarly sold in 2010 and a 10-year high for the exit type.

Business Products and Services led the corporate acquisition activity with a 29% share, followed by Commercial Products and Services
(18%), Information Technology (19%) and Healthcare (16%). With access to both records amount of cash and debt nancing, strategic
acquirers will likely continue to be frequent buyers of PE-backed companies. As active buyers, however, they also pose as competition
for private equity rms when it comes to making new investments, elevating deal prices.

Median Holding Period Corporate Acquisitions in 2011 by Industry




Secondary Buyouts
Number of Secondary Buyouts

Source: PitchBook
Last year, there were 150 secondary buyouts, transactions in which one private equity investor sells a portfolio company to another
private equity investor. Those deals represented 36% of the year’s exit activity and only a slight increase from 2010’s 142 secondary
buyouts, not the dramatic increase that many predicted or said was occurring. Among 2011’s largest secondary buyouts were the sales
of Acosta, Houston Fuel Oil Terminal Company, and Consolidated Precision Products. The median holding period for secondary buyouts
remained high in 2011 at ve years, the same as for 2010 and over a full year higher than the 10-year low of 3.7 years that accompanied
the bustling activity of 2007. Interestingly, secondary buyouts currently have the longest median holding period among the three main
exit types.

Much of the secondary buyout activity during 2011 was driven by the Business Products and Services (B2B) industry. B2B accounted for
almost half (44%) of the secondary buyouts closed last year, signi cantly higher than its shares of corporate acquisition and IPO activity.
Part of the attraction for private equity investors to stay in the industry is its resilience and recurring revenues. This year, the strong
secondary buyout activity will likely continue considering private equity rms have a large supply of mature companies they need to sell
and $425 billion of dry powder that they need to invest.
Median Holding Period Secondary Buyouts in 2011 by Industry




Initial Public Oﬀering
Number of PE-Backed IPOs

Source: PitchBook
IPO activity for PE-backed companies experienced a burst during the second quarter of 2011 with 12 such companies going public, but
that activity quickly slowed down soon after. In total, 30 PE-backed companies went public during 2011, compared to 40 in 2010. The
Consumer Products and Services industry accounted for a third of the activity during 2011, followed by Business Products and Services
and Energy with 20% and 17% shares, respectively. Last year’s three largest PE-backed IPOs were Hospital Corporation of America ($4.4
billion), Kinder Morgan ($2.9 billion) and The Nielsen Company ($1.6 billion).
Of the three main exit strategies, IPOs had the largest jump in median holding period from 2010 to 2011. The time between investment
and exit increased from 3.8 years in 2010 to 4.3 years in 2011. One interesting note is that companies taken public appear to have the
shortest hold times among the di erent exit strategies, about half a year shorter than for corporate acquisitions and about eight months
shorter than for secondary buyouts. However, IPOs tend to be a drawn out exit process for PE investors, with many selling only part of
their stakes, if anything at all, through the IPO, and then selling down their stake in batches over several months or years afterwards. The
often lengthy exit process could explain why the exit type has a signi cantly shorter median holding period, as investors begin their
long exit sooner. With large amounts of nancing available to both strategic acquirers and PE investors as well as the uncertainty of the
public markets, IPOs will probably continue to be a relatively rare occurrence for PE exits in 2012.

Median Holding Period IPOs in 2011 by Industry




Addendum
Regions Deﬁned by State
Mid-Atlantic Mountain South Southwest
District of Columbia Colorado Arkansas Arizona
Maryland Idaho Kentucky New Mexico
New Jersey Montana Louisiana
Pennsylvania Nevada Tennessee West Coast
West Virginia Utah Texas Alaska
Wyoming California
Midwest Southeast Hawaii
Illinois Northeast Alabama Oregon
Indiana Connecticut Florida Washington
Iowa Delaware Georgia
Kansas Maine Mississippi
Michigan Massachusetts North Carolina
Minnesota New Hampshire Puerto Rico
Missouri New York South Carolina
Nebraska Rhode Island Virginia
North Dakota Vermont
Ohio
Oklahoma
South Dakota
Wisconsin

Industries Deﬁned by Sector
B2B Energy Healthcare
Commercial Products Equipment Devices & Supplies
Commercial Services Exploration, Production & Re ning Healthcare Technology
Transportation Services Pharmaceuticals & Biotechnology
Other B2B: Utilities Services
Conglomerates
Goverment Financial Services Information Technology
Capital Markets/Institutions Communications & Networking
B2C Commercial Banks Hardware
Apparel & Accessories Insurance Semiconductors
Consumer Durables Other Financial Services Services
Consumer Non-Durables Software
Media
Restaurants, Hotel & Leisure
Retail
Services (Non-Financial)
Transportation


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PitchBook researches deal amounts and valuations, target company �inancials and price multiples, capitalization structures, deal
terms, investor information and service provider contact information. It also tracks deal stakeholders and participants – not just
�inancial sponsors and investors, but also the many other �inancial, legal, and advisory �irms associated with taking a deal through to
completion.

Deal monitoring and research through the entire lifecycle. Without exception, PitchBook actively researches and
What Makes PitchBook Diﬀerent
reports on companies from announcement to �inal exit. PitchBook captures the full �inancing story, much more than just a snapshot of
the deal’s announcement.
Full spectrum coverage. PitchBook covers the full spectrum of private equity deals: all sizes, all industries, and all types.
No cutting corners. It takes meticulous research to produce complete, consistent, timely, and accurate information, and we devote
the manpower and resources necessary to make this happen.

The PitchBook Platform Places Powerful Intelligence at Your Fingertips:

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Visit us at www.pitchbook.com

18 Private Equity Exits - 2012 Annual Edition www.pitchbook.com | demo@pitchbook.com | 1-877-267-5593

CUT & PASTE
STRATEGIES
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Now is the moment to revise your go-to-market strategy, or invest
in an expansion plan. Because to grow tomorrow, you have to
strategize today. Dynamic companies work with us because we
know what succeeds for growth. See what wins at growthwins.com.

Grant Thornton LLP is the U.S. member ﬁrm of Grant Thornton International Ltd.

Grant Thornton/Pitchbook PE Exits Report

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