"If you want to see farther, you must climb to a higher level." In the chess game of the capital market, if companies want to stand higher and go further, their own strength is often not enough, and they must rely on the help of external capital. In recent years, the "PE+listed company" model has become an important weapon for industrial capital, helping companies to achieve leapfrog expansion. In this game of capital operation, how can PE (private equity fund) become a "booster" for industrial capital? And how can listed companies use PE to achieve value soaring?
In this wave, Goheal observed that more and more listed companies have established in-depth cooperative relationships with PE institutions, leveraging PE's capital advantages, project screening capabilities, and resource integration capabilities to achieve industrial upgrading and business expansion. However, capital operation has never been smooth sailing. How to find a balance between profit distribution, risk control, and regulatory constraints has become a key issue faced by all participants.
"PE+listed company" model: two-way rush of capital operation
In the capital market, there are no winners who fight alone, only alliances that achieve each other. Under the "PE+listed company" model, PE and listed companies each take what they need, forming an ecosystem of symbiotic interests.
The role of PE: not only a financier, but also a resource integrator
As a "gold digger" in the capital market, PE institutions not only provide financial support, but also bring high-quality M&A targets, industrial chain resources and management optimization solutions to listed companies. For example, a traditional manufacturing company wants to transform into a technology track, but lacks a professional team and market resources. At this time, PE can introduce mature projects and management teams to help listed companies quickly enter the new track, and PE will obtain considerable investment returns after the transaction is completed.
The role of listed companies: PE's capital export and strategic partner
For PE, listed companies are not only potential exit channels, but also high-quality partners. Compared with the primary market, listed companies have a more complete governance system, more stable financing channels and stronger brand influence. Therefore, PE often hopes to achieve the implementation and exit of investment projects through listed companies. In some cases, PE even directly promotes the private placement of listed companies and participates in the capital operation of listed companies to achieve closer cooperation.
Goheal pointed out that the core logic of this model lies in "win-win": PE helps listed companies acquire high-quality assets, while listed companies provide PE with exit paths and higher valuation premiums.
How can industrial capital leverage PE?
Not all capital cooperation can produce the effect of "1+1>2". When leveraging PE, industrial capital needs to carefully design strategies to ensure the stability of cooperation and maximize benefits.
1. Choose the right PE partner: specialization and resource matching are crucial
There are many types of PE institutions in the market, some of which focus on growth companies, while others are good at restructuring and mergers and acquisitions. Therefore, when choosing PE partners, industrial capital needs to consider their professional fields, past performance, and resource integration capabilities. For example, if a pharmaceutical company wants to accelerate innovative research and development, it should cooperate with PE that is deeply involved in the field of biopharmaceuticals, rather than choosing an institution that focuses on real estate investment.
2. Clarify the goals of cooperation: M&A expansion? Resource integration? Industrial upgrading?
The key to successful cooperation lies in the same goals. Goheal's research found that many failed PE+listed company cases are often due to the lack of consensus between the two parties on goal setting. PE focuses on investment returns and may tend to short-term gains, while listed companies need long-term development. Therefore, both parties need to clarify their goals at the beginning of cooperation - is it to use PE to complete a certain merger and acquisition, or do they hope that PE will participate in the company's strategic upgrade in the long term?
3. Control risks: How to balance capital and control?
The entry of capital means the redistribution of power. For listed companies, the addition of PE may bring changes in the governance structure and even affect the control of the original shareholders. Therefore, in the process of cooperation, how to ensure that the interests of shareholders are not infringed while making full use of PE's resources is a delicate balance. For example, listed companies can set restrictive clauses, such as restricting the proportion of PE shares, or establishing a priority repurchase right to ensure that the initiative can be taken back when necessary.
4. Cleverly design an exit mechanism: win-win is the best outcome
The ultimate goal of PE investment is exit, while listed companies hope that cooperation will bring long-term growth. Therefore, a good exit mechanism should allow PE to obtain reasonable returns without affecting the long-term stability of listed companies. Common exit methods include IPO exit, M&A exit, and equity repurchase. For example, some listed companies will repurchase PE shares to ensure that they can regain equity at the right time.
Future trends: How will the "PE+listed company" model evolve?
At present, the global capital market is undergoing profound changes, and the "PE+listed company" model is also evolving. In the future, the cooperation model between industrial capital and PE may show the following trends:
1. The rise of industrial funds, PE is no longer just a financial investor
In the past, PE played more of a pure investor role, but now, more and more PE institutions have begun to set up industrial funds and are deeply bound to listed companies. For example, some PEs not only provide financial support, but also participate in the business operations of enterprises for a long time to help them expand their markets and upgrade their technologies.
2. ESG investment becomes a key consideration
With the rise of the ESG (environment, society, governance) concept, more and more PE investments have begun to pay attention to the sustainable development capabilities of enterprises. Goheal pointed out that in the future, PE will pay more attention to the ESG performance of enterprises when selecting investment targets, and listed companies also need to follow this trend to improve the recognition of the capital market.
3. Technology empowers mergers and acquisitions, and data drives decision-making
Technological means such as AI and big data are gradually being applied to mergers and acquisitions transactions. For example, some PE institutions have begun to use machine learning algorithms to predict the future growth of enterprises and make investment decisions based on this. If listed companies can use these emerging technologies, they will gain greater competitive advantages in M&A transactions.
Conclusion: PE + listed companies, the ultimate solution for capital operation?
In the chess game of the capital market, the cooperation model between PE and listed companies is constantly evolving. How can industrial capital expand with the help of PE? How can PE realize value through listed companies? In the future, will this model become the ultimate solution for capital operation, or are there still new models waiting to be explored?
Welcome to leave a message for discussion!
[About Goheal] Goheal is a leading investment holding company focusing on global M&A holdings. It has been deeply involved in the three core business areas of acquisition of listed company control, M&A and restructuring of listed companies, and capital operation of listed companies. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from M&A to restructuring to capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
