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) -- It may seem like private equity firms

Kohlberg Kravis Roberts & Company

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seem to be in a race to scoop up and sell off as many companies as they can.

KKR is said to be in talks with

Del Monte


, and purchased of


23.44% stake in the

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Colonial Pipeline Company

in October. Meanwhile, Carlyle



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for $31.50 a share in cash or $3.9 billion and

Syniverse Technologies


for $31 per share, or $2.6 billion in cash last month. Apax has also been rumored to be bidding for several companies, including

Patni Computer




That dealflow is only likely to increase next year, says William Schwitter, chair of the leveraged finance practice at Paul Hastings. Over the last few years, private equity firms have raised almost $485 billion and much of that has remained uninvested.

So private equity firms are trying to put that capital to work by acquiring portfolio companies and also financing deals.

"PE firms are sitting on a lot of unused capital right now and need to play it before they have to give it back," said William Schwitter, chair of the leveraged finance practice at Paul Hastings. "Firms are providing cushions for larger firms and are even acting as shadow banks."


study by Paul Hastings

discovered that private equity firms will likely start to dominate traditional lenders in financing deals. Some of the largest traditional lenders include

JP Morgan

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Credit Suisse

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Goldman Sachs

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. Schwitter believes that private equity will gain a lead in financing due to both changes in regulation and the desire to get deals done with, "little or no debt," or, which is driving the reemergence of, "dividend recap" deals.

"The deals we are seeing are plunging lower in terms of leverage," Schwitter said.

The Paul Hastings study found that deals in the energy and telecommunications sector were the most popular to lenders. The least popular deals to lenders were in the finance industry.

--Written by Maria Woehr in New York.

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