NEW YORK: Silver Lake's agreement to buy a majority stake in EBay's Skype unit for $2 billion shows how much private-equity firms have been forced to scale back their ambitions.

The transaction offers a telling contrast to the firm's $11.3 billion leveraged buyout (LBO) of SunGard Data Systems Inc in 2005, an early model for the debt-laden purchases that dominated LBOs until the surge ended two years later.

Private-equity investors are doing business more like they did before the market exploded, said Paul Schaye, managing director of New York-based Chestnut Hill Partners. They're targeting divisions of larger corporations, in deals known as carve-outs, and smaller companies they may have passed over at the peak of the buyout frenzy. They're paying a higher percentage of cash to sellers eager to unload businesses that are unprofitable or no longer suit their needs.