Which scenario exemplifies a secondary buyout?

A secondary buyout occurs when one private equity firm acquires a company that is already owned by another private equity firm. This situation exemplifies the transfer of ownership from one financial sponsor to another, allowing the selling firm to realize its investment and the buying firm to implement its own strategies and possibly add value to the target company.

In this scenario, the transaction is focused on two private equity firms with the goal of generating returns based on operational improvements or market repositioning of the acquired business. It's important to recognize that this differs from other scenarios such as going public, where a company transitions to being publicly traded and involves different kinds of stakeholders; direct investments from venture capital, which typically involve earlier-stage companies in need of growth capital; or partnerships on new investments, which indicate collaborative efforts rather than a single entity acquiring control over another company. This context clarifies why the sale between two private equity firms specifically denotes a secondary buyout.