Secondary Buyout (SBO)

A secondary buyout (SBO) involves the sale of a portfolio company by one private equity firm to another. This type of transaction allows the selling firm to exit its investment and realize returns, while the acquiring firm gains control of a mature company with a proven track record. SBOs are common in later-stage investments and are often used to generate liquidity for investors while offering growth opportunities for the acquiring firm.

• Private equity firm sells its stake to another firm.
• Common in later-stage private equity transactions.
• Provides liquidity for the selling firm.
• Allows the acquiring firm to take over a proven business.