Asbestos Litigation: A Prelude To LBOs? –

Buyout pros always have their eyes on corporate spin-offs and carve-outs, looking for that diamond buried in a debt-laden corporate giant. But with the moribund economy making steady gains over the past six months, the large conglomerates may stop letting non-core assets go at bargain prices.

If any of you are worried about a lack of worthy spin-offs available, don’t get discouraged just yet. Here are two words that may be music to your ears: asbestos litigation.

Large companies with large asbestos liabilities may turn into a large opportunity for buyout firms, and could be a source of steady, undervalued deal flow for some time to come.

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