Tertiary Buyout
A Tertiary Buyout is when a private equity firm sells a company to another private equity firm, and this is the third time the company has been bought this way. Think of it like passing a valuable asset from one investment group to another. This usually happens when the current private equity owner has done what they can to improve the company and wants to sell it to someone who might have fresh ideas or different resources to grow it further. It's different from selling to a regular company or going public because the business stays in the private equity world.
Examples in Resumes
Led the execution of a Tertiary Buyout valued at $500 million
Analyzed potential targets for Third-Round Buyout opportunities in the healthcare sector
Successfully completed due diligence for a PE-to-PE transaction representing the third ownership transition
Typical job title: "Private Equity Associates"
Also try searching for:
Where to Find Private Equity Associates
Professional Networks
Job Boards
Example Interview Questions
Senior Level Questions
Q: What factors would you consider when evaluating a tertiary buyout opportunity?
Expected Answer: The answer should cover assessing remaining value creation opportunities, current market conditions, industry dynamics, and why another PE firm might be interested. Should also mention understanding the previous PE firms' strategies and improvements.
Q: How would you structure a tertiary buyout deal differently from a primary buyout?
Expected Answer: Should discuss considerations like higher purchase prices, potentially more complex capital structures, and the importance of finding new angles for value creation since obvious improvements may have been already made.
Mid Level Questions
Q: What are the main challenges in a tertiary buyout versus a primary buyout?
Expected Answer: Should explain that tertiary buyouts often involve higher purchase prices, fewer obvious improvement opportunities, and the need for creative value-creation strategies since two PE firms have already worked with the company.
Q: How do you assess the potential returns in a tertiary buyout situation?
Expected Answer: Should discuss analyzing historical improvements, identifying remaining opportunities, market conditions, and how to model potential returns given the typically higher entry prices.
Junior Level Questions
Q: What is a tertiary buyout and how does it differ from other types of buyouts?
Expected Answer: Should explain that it's the third time a company is being sold between PE firms, and how this differs from primary buyouts or strategic sales to corporate buyers.
Q: What basic analysis would you perform when looking at a tertiary buyout opportunity?
Expected Answer: Should mention reviewing financial statements, understanding what previous PE owners have done to improve the business, and identifying potential remaining opportunities for growth.
Experience Level Indicators
Junior (0-2 years)
- Basic financial modeling
- Deal documentation support
- Industry research
- Due diligence assistance
Mid (2-5 years)
- Deal execution management
- Financial analysis
- Due diligence leadership
- Value creation planning
Senior (5+ years)
- Deal sourcing and evaluation
- Transaction structuring
- Negotiation leadership
- Portfolio company management
Red Flags to Watch For
- No understanding of private equity fundamentals
- Lack of experience with financial modeling
- Poor knowledge of deal structures
- No experience with due diligence processes
