Case Analysis Of Private Equity Investment Exit By M&A

After decades of development,China’s capital market has gradually entered the era of private equity investment.Private equity investment has become an important financing channel for SMEs and unlisted companies.In the operation of private equity investment,investment exit is the most important link,which determines the success or failure of investment.Common exit methods include IPO exit,mergers and acquisitions,equity repurchase,and bankruptcy liquidation.M&A exit is currently the most popular exit method for private equity investment in European and American countries,while most of the existing domestic literature focuses on the study of IPO exit methods,and research on M&A exit methods is still relatively weak.This article takes the private equity company Dianshi Refining to invest in the pharmaceutical company Hengan Ze,and chooses to sell to the listed company Chongqing Pharmaceuticals as an example to analyze and summarize the experience in the process of M&A exit,and provide a reference for subsequent private equity investment choices.In the main text,the M&A project and the parties involved are first introduced,followed by an analysis of the reasons why Dianshi Jinghua wants to exit,and a comparison of the policy exit,cost-benefit and exit effects of alternative investment exit methods Analysis,and then through the analysis of the overall investment cost and the realized return,indicating that exit through mergers and acquisitions is the ideal exit method for the project to achieve high investment returns in the short term.Judging from the implementation process,the private equity investment did not withdraw from listing,but withdrew through mergers and acquisitions,and obtained high returns in less than one year.This article combines the actual situation of my country’s private equity investment withdrawal in recent years and the trend of regulatory policies,and believes that the realization of withdrawal through M&A has broad development space.Aiming at the analysis of the status quo of my country’s private equity investment withdrawal and the existing problems and the current status of my country’s policy system,this article puts forward corresponding policy recommendations.This case analysis shows that for small and medium-sized private equity investments,M&A exit is also an ideal way for investors to consider.If operated properly,they can obtain high exit returns in a short period of time.Finally,combinedwith the analysis of the case,it is concluded that:(1)when an appropriate merger and acquisition party appears,private equity investors can choose to cooperate deeply with the merger and acquisition party;(2)in order to control investment risks and control the way and timing of investment exit Private equity investors can obtain control of the target company,and will reduce malicious acquisitions and other events that harm their own interests;(3)In the early stages of investment,private equity investors can adapt to the development needs of the parties to the transaction and can adapt to local conditions Plan ahead for the best way to exit the investment in the future.The case itself has certain typicality and particularity,which has great reference significance for enterprises in the same industry or similar private equity investors.