In a climate dominated by geopolitical uncertainty, interest rate instability, and fluctuating tariffs, private equity firms look at take-private transactions to deploy capital. As public markets remain unsettled and valuations decline, companies that were previously out of reach are now viewed as compelling strategic targets.
One recent headline-grabbing example is Skechers' $9.4 billion agreement to go private with 3G Capital. Though the companies did not mention tariffs in their announcement, Skechers, along with other footwear giants, previously lobbied against tariffs tied to China, and its valuation dropped sharply amid years of trade-related uncertainty. Reuters reported the brand's decline in market value as a contributing factor, making it an attractive target.1
Creative Structuring in a Cautious Market
As highlighted in EY's Q1 2025 Private Equity Pulse, roughly 75% of GPs expect tariff-related disruption to affect dealmaking this year.2 But rather than retreating, firms are doubling down with creative deal structures: earn-outs, seller notes, and preferred equity with downside protection are becoming standard in bridging valuation gaps and managing macro risk.
Dual-track exits, interim operating covenants, and carefully tailored material adverse effect (MAE) clauses are also gaining traction as private equity adapts to a world where even modest geopolitical exposure can throw off deal timelines.3
Strategic Patience and Global Ambitions
The resurgence of take-privates is unmistakable: in the first quarter of 2025 alone, there were 10 take-privates valued at more than $1 billion each, and these large transactions accounted for 37% of all deal activity by value.4 This momentum isn't limited to the US —recent activity in the UK and across Europe suggests that private equity firms are also capitalizing on depressed valuations to reposition companies for long-term growth away from the spotlight of public markets.
Private equity firms make money on these take-private deals by using leverage to amplify returns, driving operational improvements out of the public eye, and ultimately exiting at higher valuations, whether through a sale or IPO. Private Equity International notes that geopolitical risk is no longer a background factor, it's a primary consideration. With governments intensifying scrutiny of cross-border deals, especially in technology and defense-related sectors, national security reviews and supply chain stress tests are now essential parts of the diligence process.5
What's Next: Opportunity in Uncertainty
Rather than sitting on the sidelines, private equity firms are treating uncertainty as a catalyst for action. As attention turns to resilient sectors, such as globally exposed consumer brands, health care, and logistics, this new wave of take-private activity is increasingly defined by strategic targeting, disciplined selection, and thoughtful structuring. If public market volatility continues, private equity is poised to keep capitalizing on the disruption, not despite the uncertainty, but because of it.
Footnotes
1. Reuters. (2025, May 5). Skechers to go private in $9.4 billion deal with 3G Capital. https://www.reuters.com/markets/deals/footwear-brand-skechers-be-taken-private-9-billion-deal-2025-05-05/
2. EY. (2025, April). Private Equity Pulse: Q1 2025. https://www.ey.com/en_us/insights/private-equity/pulse
3. Financial News London. (2025, May 20). Inside private equity's month of tariff turmoil. https://www.fnlondon.com/articles/on-pause-inside-private-equitys-month-of-tariff-turmoil-e63ff043
4. EY. (2025, April). Private Equity Pulse: Q1 2025. https://www.ey.com/en_us/insights/private-equity/pulse
5. Private Equity International. (2025, May). Strategic dealmaking in volatile markets. https://www.privateequityinternational.com/strategic-dealmaking-2025
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