If exit activity in the second quarter is any indication, LBO firms continue to play the waiting game, biding their time while nursing hopes that the credit crunch will soon come to an end.
The resiliency of the crunch, as well as worsening economic conditions, has created an environment where exits were few in number and small in size in the three months ended June 30. U.S.-based buyout firms completed 38 exits through mergers or acquisitions, and led just two portfolio companies to IPOs during the most recent quarter, according to data from Thomson Reuters, publisher of PE Week. In comparison, the second quarter of last year saw 109 M&A exits and 10 Buyout-backed IPOs.
Scoring the largest exit of the second quarter was Odyssey Investment Partners, which sold Norcross Safety Products, a maker and wholesaler of head-to-toe protective equipment, to Honeywell International Inc., for about $1.22 billion.
Welsh Carson Anderson & Stowe Co. boasted the next largest exit with the sale of its 80%-owned Accuro Healthcare Solutions Inc. unit. It sold the developer of Web-based revenue management software to MedAssets Inc. for an estimated $353 million.