1)why do pe firms need an underwriting commitment from banks in order to win a bid for a company?

Answer

PE firms need an underwriting commitment from banks to ensure they have the necessary funds to complete the acquisition, and to make their bid more attractive and increase the likelihood of winning the bid.

Q: What is an underwriting commitment? A: An underwriting commitment is a guarantee from a bank to provide financing for a transaction.
Q: Why do PE firms need financing from a bank? A: PE firms often use debt to finance acquisitions. They need a bank to underwrite the debt to ensure they have the necessary funds to complete the acquisition.
Q: Why is an underwriting commitment important for winning a bid? A: Having an underwriting commitment from a bank shows the seller that the PE firm has the necessary financing in place to complete the transaction. This makes the bid more attractive and increases the likelihood of winning the bid.