7 Banger Private Equity Case Studies

We’ve all read those post-Buzzfeed clickbaiters – “You Won’t BELIEVE the 10 Biggest M&A Fails of ALL TIME.” Countless words have been spilled and content crafted over disastrous private equity case studies like AOL and Time Warner, Sprint and Nextel, Kmart and Sears, and all the other trainwrecks you’ve heard of before. But we’re not here to add to your doomscrolling. We’re here to celebrate your dealmaking.

And you know what? These seven dealmakers absolutely killed it. Soak up a little inspo from some top-tier 21st-century Ws, so you can stick those positive lessons in the VDR of your mind forever.

Table of Contents

The Dell-EMC Mega-Merger

Let’s kick it off with a classic example of large-scale, high-stakes M&A deals done right. For that, 2016’s Dell-EMC merger is a private equity case study in winning. This one starts with Dell’s $67 billion acquisition of EMC Corp in 2016. Things already look pretty good when you consider that EMP generated $74 bil in annual revenue and the deal created Dell Technologies, the biggest privately-controlled tech company on earth.

But it gets better. For one, Dell wasn’t afraid to try what others — from HP to Compaq — had tried and failed: merging with another tech company on equal footing. Secondly, they were undeterred by the notion of taking on EMC’s $50 billion in debt. And third, the deal came with a cloud computing platform called VMware, an absolute masterstroke in recognizing a component for slow-burn growth with juicy profit margins.

The Takeaway: Never underestimate the wildcard. In this case, Dell recognized that when “slow growth” is consistent, that’s actually what corporations used to call “steady growth” back before the age of exponential profits — and it still pays just as well.

Blackstone Buys EOP

Blackstone Group throwing down $39 billion to acquire Equity Office Properties (and all of their debt) in ‘07 didn’t seem too out of the ordinary at the time, until you realize that they picked up a portfolio of 500ish buildings on the eve of a historic recession. But that puzzling move turned out to be the slick genius of the whole thing: Blackstone saw a bubble coming and offloaded the bulk of that portfolio within months, then turned those sales into recession-proof office properties that essentially tripled their initial investment by 2018.

The Takeaway: Minimize risk and rake in gains by selling property at peak market values. Look that bubble in the eye and tell it you’re not afraid.

Bain’s Bloomin’ Deal

In 2006, Bain Capital Partners scrolled all the way to the bottom of the Outback Steakhouse menu – right past the Bloomin’ Onion and the Kookaburra Wings – and said, “we’ll take the whole restaurant chain” to the tune of $3.2 billion. In 2015, though, Bain sold 18 million shares (its full 15% stake in Outback’s parent company, Bloomin’ Brands) to J.P. Morgan, who then offered $70 million of that stake back to Bloomin’ Brands. The result? Bain chowed down on $464 million like a plate of Aussie-tizers.

The Takeaway: In the right circumstances, a slow cashout is absolutely the move. Don’t hesitate to leverage a stock repurchase plan when you can.

Facebook + Instagram = Pure Profit

Facebook has long since entered the uncanny valley of uncoolness, but even in the age of TikTok, Instagram remains cool. Such can be said socially, and it can also be said…business-ally. That’s because in 2012, Facebook acquired Insta for $1 billion, making for an absolute dollar return of $152 billion.

The real beauty here is that, in contrast to other app acquisitions like Google buying YouTube, FB scooped up an asset that doesn’t require any budget for content creation – it doesn’t even pay revenue shares to creators when content explodes. People make content at no cost to Facebook Meta, which means Instagram rakes in annual revenue of about $51.4 billion.

The Takeaway: One-time investments that generate continued returns with low upkeep costs are so naturally beautiful, they don’t need any filters.

The $1 Barstool Deal

No, this isn’t a Craigslist ad in Cleveland. It’s a private equity case study worthy of a Netflix miniseries.

In 2023, Penn Entertainment picked up Dave Portnoy’s sports media brand, Barstool, for $551 million. Just months later, Penn divested, citing a desire to be free of “non-compete and other restrictive covenants” in the deal. And there was Portnoy, ready with a deal to buy Barstool back for $1, in exchange for promising Penn 50 percent of the proceeds from any future sales of the brand.

The Takeaway: Innovative IP handling and non-compete clauses are your friend, and it never hurts to bet on yourself.

AT&T Gets More Than Just Bellsouth

Alright, those private equity case study listicles have handed AT&T enough Ls. We’re focusing on inspirational stories here, so how about a case that proves that you’re not defined by your worst deals?

Not that AT&T is a scrappy underdog or anything, but they’re more than just the infamous Time Warner debacle. In 2006, they snagged BellSouth for $67 million, increasing their market capitalization from $110 to $170 billion. Much of what made this deal so savvy is that AT&T didn’t just acquire a lucrative wireless carrier with obvious synergies, they also acquired its 62 million subscribers.

The Takeaway: Sometimes, a deal’s value-ad isn’t just a bonus – it can straight-up make the whole deal.

Google Buys Android for a Song

Google’s 2005 acquisition of Android will forever be one for the ages, the absorption of a new company that fits the parent company’s identity and purpose so neatly, that it feels like it’s always been there. That’s the definition of synergy, and it gets even crazier when you consider that Big G scooped up the biggest mobile OS in history for a mere $50 mil at the time, multiplying their ROI by 1,400 and eventually leading to an 80-percent market share.

The Takeaway: Acquiring evergreen software that adds a foundational and flexible utility to your company is almost always a great deal.

Totally unrelated, we know of an evergreen software acquisition you could make that starts at $149 per month. That’s objectively a way better deal than $50 million. We’ll hold on to the 8th spot for you.

Dan is a freelance writer with over a decade of experience, currently residing in Dallas, TX. Along the way, he’s been lucky enough to collaborate with brands including Fortune, The Motley Fool, Office Depot, MSN Money, and many more.