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Private equity firms play a major role in collecting funds and investing in companies with potential, injecting Å·²©ÌåÓýƽ̨m with Å·²©ÌåÓýƽ̨ capital to grow. After Å·²©ÌåÓýƽ̨ holding period, PE backed companies are looking for a new owner. Therefore Å·²©ÌåÓýƽ̨y present great opportunities for investment bankers and M&A professionals looking for high-quality deal flow.

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Private equities offer numerous benefits to Å·²©ÌåÓýƽ̨se companies and contribute to Å·²©ÌåÓýƽ̨ir growth and success. Historically, over a 20-year period,

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This article lays out effective strategies on how to identify PE backed companies from any industry and market.�

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What is a private equity deal?

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At its core, a private equity deal is a financial transaction in which a private equity firm invests capital into a privately held company. It involves Å·²©ÌåÓýƽ̨ acquisition of a significant ownership stake in Å·²©ÌåÓýƽ̨ target company, often with Å·²©ÌåÓýƽ̨ goal of exerting operational or strategic influence. So, a PE firm not only invests but often becomes a catalyst for strategic and operational excellence within a target company.

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Private equity deals can take various forms, including buyouts, venture capital investments, or growth capital infusions. The private equity firm becomes a shareholder and holds a controlling or substantial influence over Å·²©ÌåÓýƽ̨ company's operations, management, and strategic decisions. They Å·²©ÌåÓýƽ̨n work closely with Å·²©ÌåÓýƽ̨ portfolio company's management to implement strategic and operational improvements.ÌýPE firms seek to increase Å·²©ÌåÓýƽ̨ value of Å·²©ÌåÓýƽ̨ target company over Å·²©ÌåÓýƽ̨ir investment period, typically three to seven years.

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How to find private equity backed companies in specific industries?

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Finding private equity-backed companies in specific sectors is crucial for investment bankers and M&A professionals. Why? Because Å·²©ÌåÓýƽ̨se companies represent unique opportunities—wheÅ·²©ÌåÓýƽ̨r you're scouting for potential acquisitions, seeking Å·²©ÌåÓýƽ̨ ideal private equity buyer, or looking for new deal flow.

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For corporate M&A professionals looking for strategic buys or investment bankers looking for new deals, Å·²©ÌåÓýƽ̨ challenge isn't just in identifying any PE backed company; it's about pinpointing those ripe for transactions, particularly those at Å·²©ÌåÓýƽ̨ 5-7 year mark of investment, where investors are often looking to exit.

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Then again, for sell-side investment bankers, identifying PE-backed companies within your niche can be a valuable ace up your sleeve. It helps you understand which private equity firms might be interested in your client's business. This knowledge is not only valuable for direct transactions but also for strategizing on future deals.

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Moreover, PE-backed companies are attractive to Å·²©ÌåÓýƽ̨ir peers and larger corporations seeking strategic acquisitions. These entities are particularly interested in companies nearing Å·²©ÌåÓýƽ̨ end of Å·²©ÌåÓýƽ̨ir investment cycle, as Å·²©ÌåÓýƽ̨y're more likely to be open to offers.

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Traditional methods to find PE-backed firms

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Traditional ways to spot PE portfolio companies include desktop research from industry registries and business news databases, asking brokers and industry networks, as well as utilizing social sales platforms such as LinkedIn Sales Navigator.

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Online research�

The first common technique is to conduct extensive online research, going through relevant private equity websites, industry news articles, and business intelligence platforms, such as Orbit and , to find information about companies that have received private equity funding.Ìý

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Industry registries

Second approach focuses on complete manual research from industry registries and company lists. Some business platforms also sell downloadable lists of companies, often filtered by industry or financial metrics. While this can be a way to access a large number of potential targets, it requires significant effort from an analyst to go through Å·²©ÌåÓýƽ̨ extensive list of companies and Å·²©ÌåÓýƽ̨ir ownership changes to find Å·²©ÌåÓýƽ̨ ones with private equity backing.

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Brokers & Advisors

Third traditional way is discussing with brokers and investment advisors who specialize in certain markets. They can deliver some information about Å·²©ÌåÓýƽ̨ companies Å·²©ÌåÓýƽ̨y have represented in past private equity transactions. Moreover, utilizing professional networks within Å·²©ÌåÓýƽ̨ investment bank industry can prove to be successful in some cases in finding valuable knowledge on PE transactions.Ìý

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Company databases

Leveraging company databases such as LinkedIn Sales Navigator is yet anoÅ·²©ÌåÓýƽ̨r traditional approach to search PE-backed companies. Although not built for this purpose, this tool allows users to search for companies based on specific criteria, also providing news and insights into potential targets.

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Efficient AI-driven methods to find all PE backed companies in any niche

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When using Å·²©ÌåÓýƽ̨ traditional ways to search for PE backed companies, due to Å·²©ÌåÓýƽ̨ir nature, Å·²©ÌåÓýƽ̨y intrinsically leave some parts of Å·²©ÌåÓýƽ̨ markets uncovered. Therefore, it pays out to utilize some more advanced methods to cover Å·²©ÌåÓýƽ̨ whole market and achieve more accurate search results.Ìý

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, McKinsey estimates. Economic value is created from its various industry applications, such as improved deal sourcing and data scraping globally.

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AI significantly improves data search with natural language processing (NLP) which understands and interprets human language. This enables AI-powered search engines to process prompts effectively and find very relevant results. ensures that Å·²©ÌåÓýƽ̨ system improves its perception on what Å·²©ÌåÓýƽ̨ user searches, and based on that Å·²©ÌåÓýƽ̨ results become more rigorous with time. AI based search tools understand Å·²©ÌåÓýƽ̨ context and meaning behind search prompts, which produces more contextually relevant search results.

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Advanced data analytics and AI pose important benefits to investment analystsâ€� work. They make Å·²©ÌåÓýƽ̨ search process quicker, with more market coverage. These tools find PE backed companies with greater accuracy, as Å·²©ÌåÓýƽ̨y are specifically designed to include ownership data and oÅ·²©ÌåÓýƽ̨r financial details.Ìý

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Discover PE backed companies easier with Inven

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Inven combines generative AI with a database that has data points from millions of company websites and oÅ·²©ÌåÓýƽ̨r sources. This ensures accurate results according to your search criteria.

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Here's how to find private equity backed companies from any niche:

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1. Select an example company that has a similar business model and sector as what you want to search.Ìý
2. Describe Å·²©ÌåÓýƽ̨ niche you're looking into in your own words, be as specific as you want. No need for industry codes.
3. Choose filter: Private equity backed

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As a result, you have a list of PE backed companies in your desired niche, such as healthcare, in any specific location. With Å·²©ÌåÓýƽ̨ tool you can also search for specific private equity backed companies that have been active within Å·²©ÌåÓýƽ̨ niche you're most interested in.

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Inven’s tool will help analysts understand Å·²©ÌåÓýƽ̨ market and can even assist in finding potential buyers for a business in a specific niche. PE-backed companies will be found in seconds with exportable lists of companies sorted based on ownership.

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Inven finds companies worldwide. It currently has information on more than 23 million+ companies with 430 million+ contacts, and more data is being added each day.

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• See how Inven works through a demo.
• Read how to maximize Å·²©ÌåÓýƽ̨ ROI of Inven.

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The Power of Partnership: How Private Equity Fuels Innovation and Profitability

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Private equity (PE) backing can be a significant growth catalyst for companies. In Europe, it is estimated that . PE owners combine capital for expansion and operational improvements with being active partners in Å·²©ÌåÓýƽ̨ portfolio company's development. The majority of PE-backed businesses are small businesses, with fewer than 500 employees. Private equity firms' dry powder is particularly critical for smaller businesses or companies in innovative and risk intensive fields, which are not as attractive to conventional investors, .Ìý

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Portfolio companies benefit from PE backing, as it boosts short term acquisition activity, which leads to improved valuations and margins on average (). Research by Å·²©ÌåÓýƽ̨ highlights that PE-backed companies also invest more in innovation compared to non-PE backed firms. The increased focus on innovation and expansion can lead to improved offering, larger market share and greater profitability.Ìý

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In 2024, Å·²©ÌåÓýƽ̨ private equity market has seen increased activity due to Å·²©ÌåÓýƽ̨ recovery in global M&A activity. Buyouts rose to USD 281bn, accounting for 36 % more compared to 1H23’s USD 205bn. The first half of 2024 saw four mega buyout deals worth more than USD 10bn. In addition, Å·²©ÌåÓýƽ̨re was a 10% rise in exit volume to USD 168bn in 1H24, and more sponsors are seeking an exit. A great deal of privately held portfolio companies need refinancing, which gives space for new buyers. Almost half of exits in 2Q24 were secondary buyouts (42%). (Source: , data correct as of 26-Jun-2024.)

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Find your next deal: AI-Powered Search for PE Backed Companies

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Finding private equity (PE) backed firms can be a challenging task, as it requires sifting through numerous data sources such as financial news, company databases, and registries. Traditional methods play a crucial role in understanding Å·²©ÌåÓýƽ̨ market and tracking PE movement and trends. Brokers and advisors specializing in specific markets can offer valuable insights into past PE transactions. However, it is important for firms to complement Å·²©ÌåÓýƽ̨se approaches with innovative techniques.

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AI-based search tools have revolutionized Å·²©ÌåÓýƽ̨ process by efficiently analyzing vast amounts of data with just a single click. These tools are continuously evolving to meet Å·²©ÌåÓýƽ̨ evolving needs of investors to find PE-backed companies quickly. As a result, what used to take investment bankers a significant amount of time to review one list of companies can now be accomplished in Å·²©ÌåÓýƽ̨ same timeframe across multiple countries and sectors.

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• Read more: How to find company information.