Club Deals

But even with the increased fund-raising capacity of the top firms, some of the biggest deals are beyond the purchasing power of any one firm; increasingly, private equity firms are joining together for specific transactions. These “club deals” allow the firms to share risk and purchase ever larger companies.

These buyouts often involve familiar brand-name companies worth billions of dollars and which employ thousands of people. For example, the table below lists 10 of the largest private equity buyouts announced in the past two years; all but one was a “club deal.” The value of these deals totaled more than $270 billion and estimates based on public filings suggest that 630,000 employees were involved.

Several of the nation's largest firms, including Kohlberg Kravis Roberts & Co., the Carlyle Group, Clayton, Dubilier & Rice and Silver Lake Partners, have received letters from the Justice Department seeking broad information about their business practices and involvements in club deal auctions going back to 2003. The inquiry appears to be part of a civil investigation into whether these big buyout firms may have conspired to restrict competition and hold auction prices down by forming bidding groups and agreeing not to compete against each other when multiple firms are interested in the same deal.