Private equity (PE) and mergers and acquisitions (M&A) are deeply intertwined, yet each operates with its own strategic priorities, timelines, and education styles.
This article explores how M&A and private equity intersect in practice, analyzes the current state of the private equity landscape, and explains why M&A remains a core value-creation lever for PE firms. We’ll also break down what makes PE-driven deals distinct, how they’re structured, and the playbooks firms use to accelerate post-acquisition growth.
What is private equity, and how does it relate to M&A?
Private equity refers to investments made in private companies—or the privatization of public companies—by PE firms or funds.. These investments typically involve significant capital and a defined timeframe to improve performance and achieve a profitable exit through a sale or IPO.
Mergers and acquisitions are transactions in which one company merges with or acquires another. These deals are often driven by the need to expand, enter new markets, improve margins, or gain strategic capabilities.
What’s the correlation between the two? The connection between private equity and M&A is foundational. Private equity firms frequently use M&A as a core tool to execute their investment strategy. As PwC puts it, “M&A is a lifeblood of the private equity world”.
What makes M&A in private equity unique
Private equity M&A stands apart from traditional corporate deals due to its distinct structure, fast pace, and return-driven approach.
Key differences include:
- Shorter holding periods
PE firms typically aim to improve and exit their portfolio companies within 3–7 years, unlike corporates that often take a longer-term strategic view.
- Debt-leveraged deals
Most acquisitions are structured as leveraged buyouts (LBOs), combining equity with significant debt to boost returns.
- Add-on strategies
Rather than acquiring one large company, PE firms often expand a “platform” by acquiring smaller, complementary companies to build scale and capabilities.
- Integration discipline
PE deals place strong emphasis on deal integration post-close. The focus is on rapid execution of operational improvements and synergy capture, often driven by pre-defined value-creation plans.
These characteristics make private equity M&A highly strategic and performance-driven. Every acquisition must deliver measurable value within a set timeframe, with limited room for inefficiency or strategic drift.
Market trends and the impact of private equity in M&A
Let’s examine the current private equity M&A landscape based on recent data and industry insights:
- In the first half of 2025, global private equity deal value rose by 18.7% year-over-year, reaching $386.42 billion, while deal volume dropped 6%, totaling 6,188 transactions.
- The broader M&A sector mirrored this shift: although global deal volume declined 9% in H1 2025, overall deal value increased 15%, hitting $1.5 trillion.
- Large transactions continue to drive deal value, such as Sycamore Partners’ $23.7 billion acquisition of Walgreens Boots Alliance and GTCR’s $24.25 billion sale of Worldpay.
- Dry powder (uninvested capital) remains abundant, at approximately $2.5 trillion globally, down slightly from 2023 levels but still historically high.
In general, market conditions in 2025 are marked by both caution and opportunity. Despite macroeconomic headwinds such as rate volatility and geopolitical tensions, leading firms remain bullish.
The deals’ environment is both frustrating and extraordinarily exciting. As the market spins new challenges, it’s easy to hoard cash and hit pause, but we advocate doing the opposite: focus on thematics, drive your analysis deeper than ever, and bring your strategy to life.
Brian Levy
Global Deals Industries Leader, PwC US
Key roles and responsibilities in PE M&A
M&A in private equity involves a specialized team working together to find, execute, and manage deals. While corporate and PE M&A roles may look similar on the surface, PE teams are more return-focused and tend to move faster across multiple active deals and portfolio companies.
Below is a breakdown of key roles in private equity versus corporate M&A, along with what each player typically handles:
| Role | Private equity | Corporate M&A |
|---|---|---|
| Managing Partner / Partner | Sets strategy, oversees fundraising, and leads final investment decisions. Often serves on boards. | Oversees overall M&A strategy and ensures alignment with corporate growth goals. |
| Principal / Vice President | Sources deals, leads due diligence, manages financial modeling, and negotiates terms. | Manages deal pipeline, conducts due diligence, and supports integration planning. |
| Associate / Senior Associate | Supports deal execution, runs valuations, prepares investment memos, and analyzes market conditions. | Works on financial modeling, industry research, and internal approvals. |
| Operating Partner | Works hands-on with portfolio companies to improve operations and execute growth plans. | Not typically a defined role; operational support may come from other departments. |
| Analyst | Handles initial screening, data gathering, and industry benchmarking. | Assists with research, data analysis, and presentation materials for M&A leadership. |
| Legal & Compliance Specialist | Oversees contracts, due diligence, regulatory reviews, and deal structure. | Ensures all transactions meet legal and regulatory requirements. |
PE teams are structured for speed and capital efficiency. They are designed to evaluate, execute, and optimize across a portfolio.
Corporate M&A teams, in contrast, often require deeper internal coordination across departments like strategy, product, and operations.
Key strategies and approaches in PE-driven M&A
Private equity firms use a range of strategies to drive value creation through M&A:
- Buyouts
The most common approach. PE firms acquire a controlling stake in a company, usually through a leveraged buyout, and work to improve its value before selling.
- Growth capital
Instead of taking control, the firm invests in a fast-growing company to fuel expansion. These deals are less about cutting costs and more about scaling.
- Roll-ups
A strategy in which the firm acquires several smaller companies within the same industry to create a larger, more competitive business.
- Bolt-ons
Also called add-ons, these are smaller acquisitions made to complement a larger platform company. A bolt-on strategy helps expand offerings, enter new markets, or acquire technology or talent.
- Carve-outs
The firm buys a non-core division from a large corporation and turns it into a standalone business. These often have strong potential but need focused management.
Integration best practices for PE deals
In M&A private equity, integration is not an afterthought—it’s a cornerstone of value realization. PE firms apply structured and repeatable playbooks to accelerate post-deal execution.
Key best practices include:
- Deploy operating partners
Private equity firms often place experienced operating partners into their portfolio companies. These professionals bring industry-specific expertise and help management teams execute the value-creation plan quickly and effectively.
- Use structured playbooks
Many firms rely on standardized integration playbooks that outline best practices for the first 100 days. These playbooks ensure consistency across deals and help teams stay focused on key priorities like cost savings, revenue growth, and team alignment.
- Form agile project teams
Dedicated M&A integration teams are set up early in the process, often before the deal closes. Such teams are cross-functional and flexible, allowing them to respond quickly to challenges, manage timelines, and adapt as needed.
- Monitor performance metrics closely
Metrics such as revenue, EBITDA, cash conversion, or churn are tracked from Day 1 to measure whether the deal is meeting ROI expectations.
Learn how to create a well-structured M&A playbook for successful integration.
Private equity buyer vs. corporate buyer: When to use each
For sellers, choosing between a private equity buyer and a corporate buyer depends on their goals, company profile, and future vision. Both types bring different strengths to the table.
Here’s a side-by-side comparison to help understand when each option makes the most sense:
| Factor | Private equity buyer | Corporate buyer |
|---|---|---|
| Deal speed | Typically faster, with streamlined decision-making | Often slower due to internal approvals and long-term planning |
| Flexibility | High flexibility in deal structures and ownership models | Less flexible, often requires full integration into existing operations |
| Growth strategy | Focus on operational improvements, scaling, and add-on acquisitions | Focus on long-term synergies and strategic alignment |
| Ideal target company | Profitable but underperforming, or founder-led businesses seeking partial exit | Companies that complement existing products, markets, or technology |
| Post-deal focus | Rapid value creation, clear exit plan in 3–7 years | Integration into a larger corporate structure for long-term growth |
So, when to choose each option?
- Choose a private equity buyer when your focus areas are speed, flexible deal terms, and a short-to-mid-term growth plan.
- Choose a corporate buyer when your top priorities are strategic fit, industry alignment, and long-term integration.
Key takeaways
- M&A and private equity are tightly linked—PE firms rely on M&A to drive returns through buyouts, add-ons, and carve-outs.
- PE M&A deals are marked by speed, leveraged capital structures, and a focus on short- to mid-term value creation.
- Common PE strategies include buyouts, growth capital, roll-ups, bolt-ons, and carve-outs, with each serving specific value-creation paths.
- Effective private equity and M&A integration relies on operating partners, structured playbooks, agile teams, and close performance tracking.
- PE buyers offer flexibility and fast execution, while corporate buyers offer long-term stability and synergy.
