Exit Strategies for Private Equity Investments

Private equity firms consider various exit strategies to realize returns on their investments. One common approach involves selling the portfolio company to another entity, often referred to as a strategic buyer. This approach can yield a profitable outcome if the buyer recognizes synergies or the potential for growth in the acquired company. It is important to understand how different exit strategies might impact the valuation of private equity holdings.

Which of the following represents a primary exit strategy for a private equity firm when looking to maximize returns on an investment?