Chrisanne Corbett, Head of KPMG Corporate Finance's Private Equity Coverage Team, was interviewed on PrivateEquityCentral.net

February 6, 2009

Chrisanne Corbett, managing director and head of the Private Equity Coverage Team at KPMG Corporate Finance, was interviewed by PrivateEquityCentral.net regarding the current climate in private equity and what KPMG Corporate Finance is doing to weather the storm.   

What we do is we get retained by the client – the client could be a private equity group or could be a privately held business, or a corporate with a spin-out – and we guide them through the whole process of putting information memorandum together, determining the buyer list –  among private equity, strategic – and then we go out and make all those calls and determine which are the best groups to come in and meet the team. Then proceed with a letter of intent. We run a typical investment banking operation. I would say, but what we do differently is we will make all the initial calls to the private equity groups to screen them at a high level, to make sure we’re getting the attention on our deal and the right people at the PE firm are seeing our deal. Typically the lead people on the deal will contact the strategic buyers.

We’re still out there marketing. We’re not retrenching in this market, because we still want to understand, I think even more so now. We still have deals in the market. We’re quite active on our special situation side, where we’ve seen an increase in private equity funds that say they’re interested in special situations transactions, or they’ve set up a separate fund for those types of transactions. We’re still out there, understanding who is investing in this market, who has relationships with lenders, and also which lenders are actively putting money to work. I would say the amount of activity has reduced, but we’re still out there marketing and talking to funds.

The IPO market in the middle market has been pretty slow for a while. What we’ve just seen in general is there’s been a huge slow-down, obviously. It’s because the financing is still pretty frozen, even in the lower to mid-market. We just don’t see a lot of lenders willing to lend. As a result there aren’t a lot of deals. A lot of people don’t want to sell because they don’t see any signs of life in the credit market, or in the general economic news, or when they monitor the performance of these companies.

I think what we’re seeing is less leverage, because I think it will be a while before the debt markets fully recover, and we’re probably not going to see some of the multiples that we saw for the last several years. I think there will be some consolidation among the private equity groups. Or there will be longer hold periods on some of these portfolio companies.

We have seen some of the larger groups saying they’ll look at smaller deals. We’ve been approached by some groups saying they will look at a range that they would not have looked at a year ago. There will be changes. But there’s a lot of private capital out there and there’s just not a lot of deal flow. It just depends on how long this state lasts.

About KPMG Corporate Finance LLC

KPMG Corporate Finance provides a full suite of investment banking and advisory services to its domestic and international clients. Our professionals have the experience and depth of knowledge in global M&A and project finance to advise clients on mergers and acquisitions, sales and divestitures, buy-outs, financings, restructurings, fairness opinions, infrastructure project finance, and other advisory initiatives. In addition, we remain independent of financing sources, helping to ensure that our efforts are objective and aligned with the goals of KPMG’s firms’ clients.

Operating in 62 countries, KPMG’s Corporate Finance practice comprises more than 2,200 professionals who are able to meet the needs of KPMG’s firms’ clients across the globe. In 2008, as a leading financial adviser, KPMG’s Corporate Finance practice completed 390 deals totaling US$51.5 billion, according to Thomson Financial’s global M&A league tables.