A $20-25 billion deal is bound to hit the buyout world this year, said Rod Reed, a vice chairman in JPMorgan's financial sponsors group, possibly with the help of the targets themselves. Reed said all the conditions are ripe for a deal to come close to RJR Nabisco's $25 billion buyout, still the largest ever. Debt markets are still friendly to private equity firms, buyout shops are raising more money than ever and, most importantly, more corporations are looking to escape from the public markets.

"It's not just Sarbanes-Oxley," said James Quella, senior managing director at The Blackstone Group, about the approaches the firm receives from large public companies interested in going private. Quella said he hears more executives from large public companies complaining about expectations to boost earnings growth every quarter. Blackstone's phone logs proved the point. For the first time, he said, public companies call Blackstone more than the firm calls them. "They're companies thinking about going private," he said.

This willingness to walk into buyouts' embrace is "a terrific profit opportunity," Reed said. Big companies have larger inefficiencies. And if the deals go sour, they offer more ways to exit--through sales or refinancing. "I'd rather have a big deal go bad than a small deal," he said. "There are a whole lot more windows to jump out of."

Within months, there could easily be more than five firms with war chests greater than $8 billion, each with the ability to write equity checks of $800 million or greater. Buyout shops usually put up 20-25% of the purchase price in equity. So, Reed said, if five of them team up and write five equity checks totaling $4 billion they could pull off a $20 billion deal.

JPMorgan handled some of the debt financing for the seven-member consortium that bought SunGard for $11.8 billion last year, in which the buyout shops contributed $3.5 billion in equity altogether. "We thought we were masters of the universe when we did the SunGard deal, the biggest since RJR," Reed said. "Then, a few months later, came TDC at $15 billion and Hertz at $15 billion."