Private M&A: Few and far between

One of the most striking things about M&A between private companies is how very few deals there are. The dearth is especially notable given that most of these companies are incomplete business systems, or are startups in hot fields where a bit of consolidation might be helpful.

Indeed, the nature of the assets being acquired, and the lack of a market for these companies’ equity, is part of what makes these deals so hard to do. “Private to private M&A is notoriously difficult because there’s no market that tells you what it’s worth,” noted Steve Elms of Perseus-Soros BioPharmaceutical Fund. About 60% of his investments are in private companies...