Courtesy of Churchill Financial’s weekly “On The Left” newsletter, here is one senior GP’s take on the difficulties of the market these days:
“Remember your eighth grade algebra? Figuring out the buyout game today is like trying to solve a three-variable equation. Assume ‘x’ is the target’s earnings, ‘y’ is the purchase price multiple, and ‘z’ is your cost of capital. With three unknowns, you can’t solve the equation.”
The entire newsletter is available here.