Private-equity megadeals may challenge 22-year record as cash pile goes to work

By Steve Gelsi

S&P is tracking 13 private-equity mergers of $5 billion or more in 2024, on course to beat the 22-year high set in 2021

Private-equity dealmakers have moved to spend down a large pile of unused cash on a larger number of transactions of $5 billion or more in 2024, S&P Global Market Intelligence said Monday.

All told, private-equity firms now have about $2.6 trillion in unused capital earmarked for dealmaking, S&P said. The money is often described as dry powder, a naval term for ship-stored explosives that haven't been tainted by seawater.

Janet Brooks, a partner at private-placement agent Monument Group, told S&P that companies "are behind on deployment" and are looking to put money to work as interest-rates stabilize at their highest levels this year and the Federal Reserve heads toward a likely interest-rate cut in September.

So far in 2024, S&P has tracked 13 so-called megadeals of $5 billion or more, which have a combined dollar volume of $123.6 billion as of July 29.

That's up from the full-year 2023 total of eight megadeals totaling $75.2 billion.

It's also on track to beat the 22-year high set in 2021 of 25 deals of $5 billion or more and a total combined transaction value of $240.6 billion (see chart below).

Topping the list of 2024 private-equity megadeals is Silver Lake's take-private of Endeavor Group Holdings Inc. (EDR). With a value of more than $21 billion, it's the largest private-equity deal so far this year. Silver Lake held $18.4 billion in dry powder as of Aug. 12, S&P said.

Among other megadeals, Apollo Global Management Inc. (APO), which has about $42 billion in dry powder, plans to spend $11.2 billion for a 49% stake in a joint venture related to Intel Corp.'s (INTC) factory in Ireland.

KKR & Co. (KKR) and the Carlyle Group Inc. (CG) agreed to buy prime student loans from Discover Financial Services (DFS) in a deal valued at nearly $11 billion.

KKR has about $42 billion of dry powder as of Aug. 12, while Carlyle holds about $23 billion.

Also read: Private equity: Everything you always wanted to know about this $12 trillion asset class but were afraid to ask

-Steve Gelsi

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08-19-24 1030ET

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