Pitchbook report: what is the standard of value when the most likely acquirer is another private equity firm?

BVWire has made several cautionary comments about the fact that so much of the supposed increase in deal activity is PE firms selling assets to other PE firms.  Appraisers might question whether the prices paid, and deal structures, have much in common with "fair market value" as we know it from 59-60, USPAP, and SSVS-1.  Or does the fact that secondary buyouts are dominating the transactional part of our economy somehow alter market approach conclusions and methods?

We're not sure of the answer to that question...but the evidence continues to mount.  Here's a new report published by Pitchbook this morning which confirms what most appraisers have been hearing about the middle and upper-middle market.   P.S. this report also confirms why the lower and mom-and-pop deal markets continue to be essentially non-existent. Is this any way to run an economy?

In the last year and a half, 182 U.S.-headquartered companies have been sold by one PE investor to another, according to the PitchBook Platform. 8 of those secondary buyouts have been billion dollar deals. So far this year, 49 secondary buyouts have been completed, putting 2011 behind last year's deal pace. During 2010, 133 secondary buyouts were closed. The B2B industry has accounted for 36% of the secondary buyout activity, making it the most active industry for secondary buyouts. The second most active is the B2C industry, which posted a 31% share.
BVR is Pitchbook's marketing partner on the Guideline Public Company Comps Tool.