Want to better execute secondary buyouts? Start with the right data

In 2017, 46 percent of all private equity-backed exits were secondary buyouts. Beyond acting as an exit strategy, more and more PE investors are using SBOs as a deal sourcing technique (SBOs made up 19 percent of all buyout transactions last year).

As secondary buyouts become more prominent in terms of exiting and investing, private equity firms should make sure they have the data they need to execute them successfully. To help you evaluate whether you have access to data for SBOs, we compiled a list of datasets your data provider should offer.

What to look for in a data provider

Exhaustive info on investors to create buyers lists

With comprehensive data on investors’ previous deals and preferences, you can find the buyers that are most likely to purchase your portfolio company. Seeing if a potential buyer has completed an SBO in the past could also help you see who is more likely to complete another one.

	Investment history
	Investment preferences
	Past SBO activity

Granular data on companies to find the right targets

Detailed data is critical for finding companies that align with your investment strategy and determining whether a target is worth pursuing. Executives’ contact information can help you reach out and move things forward.

	Industry
	Financing history
	Revenue, EBITDA and other financials
	Investors
	Executives
	Similar companies
	Contact information

Deal details to build more accurate comps

With granular data on precedent transactions, you can zero in on the information you need and build comps that are as precise as possible.

	Deal size
	Multiples
	Valuation

Fund performance data to inform your strategy

To gain a competitive advantage, many PE firms are opening specialized funds that invest in specific kinds of companies at specific stages. Because these fund managers have niche expertise, they can better extract value from companies that have already been sponsored—a valuable attribute in an environment where most viable targets are already sponsored. With the right data, you can see how specialized private equity funds have performed and evaluate different strategies to inform your future approach. You can also find fund managers with specific experience and a proven track record to hire for your firm.

	Cash flow multiples
	IRR
	Actual investments
	Benchmarks
	Limited partners