It is well-understood that private equity valuations currently exceed what public market investors are willing to pay for assets. This is most evident in the recent private to pubic IPO transactions of Peloton (PTON), Slack Technologies (WORK), Uber (UBER), and most publicly with SoftBank's (SFTBY) failed attempt to bring WeWork public.
This public-private valuation gap is reversed when P/E firms purchase publicly traded assets and take private transactions at premiums and subsequently carry them at yet higher valuations. It is a public-to-private valuation arbitrage.
Genesee & Wyoming