What happens when the private equity buyout boom ends - Feb. 26, 2007

CNN has an interesting look at private equity's role in recent buyout boom. (The video is good introduction)

What happens when the private equity buyout boom ends - Feb. 26, 2007:

"Utility firm TXU Corp. (Charts) said Monday it agreed to be bought by Kohlberg Kravis Roberts, Texas Pacific Group and the private equity arm of Goldman Sachs (Charts) for $32 billion, or nearly $45 billion including assumed debt, making it the biggest buyout ever.

The move comes just weeks after Blackstone Group put together what was then the biggest buyout deal when it finalized its $39 billion takeover of Equity Office earlier this month - $23 billion in cash and $16 billion in assumed debt."

Are things getting out of control?

"During the last buyout craze of the late 1980s, private equity firms were gushing with money and paying ever-higher prices for deals.

The biggest takeover of that era, KKR's $31 billion buyout of RJR Nabisco, which included debt - a deal chronicled in the well known book "Barbarians at the Gate" - became a nightmare and reportedly resulted in nearly $1 billion in losses for its investors"