Blue Horseshoe loves health care companies

By Kleinheider Posted on October 14, 2009 at 12:22 pm

Buyout firms prefer defensive sectors:

Almost two thirds of buyout firms are shifting to deals in defensive sectors such as health as they face the threat of losing control of their companies to banks, a survey by accountancy firm Grant Thornton has found.

Private equity firms are struggling with the debt they piled on their portfolio companies at the height of the boom, as a downturn in sales forces many firms into difficult discussions with the banks.

Healthcare and support services companies will be the most attractive to buyout firms as they search for deals that provide steady cash flow, Grant Thornton said on Monday.

“A growing number of private equity executives feel compelled to shift their focus to those sectors that are popular with the institutional investors that need to provide the finance for new acquisitions,” head of private equity, Mo Merali, said in a statement.

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Tags: buyouts, Grant Thornton LLP, investment management, private equity