The market for leveraged buyouts has sprung back to life after private-equity firms finished triaging their coronavirus-stricken portfolio companies and shifted attention back to their mounting cash piles, the Wall Street Journal reported. Buyout firms spent the bulk of the second quarter battened down as they assessed the economic damage of the shutdown on the companies they own, particularly those in hard-hit sectors such as live entertainment, travel, retail and energy. Those in need conserved cash, drew down revolving-credit facilities or sought rescue financing. That trend reversed itself in the three months ended Sept. 30 as firms struck $146 billion of new deals globally, up from a feeble $53.3 billion in the second quarter and $103.8 billion in the third quarter of 2019, according to Dealogic. In the opening weeks of the fourth quarter, $17.4 billion of buyouts have already been announced. Some of those were new deals, and another chunk represented the resumption of sale processes that were put on hold when the virus struck, according to bankers and buyout executives. Facilitating the comeback was the return of the market for leveraged loans, the below-investment-grade loans used to fund many buyouts, which retreated significantly when most of the world went into lockdown.
