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> This is a classic case of where a smaller PE firm will come in and buy it out for a few million, purposefully cut the services revenue, go hog wild selling so
by bane 9y ago
> This is a classic case of where a smaller PE firm will come in and buy it out for a few million, purposefully cut the services revenue, go hog wild selling software, and flip it a few years later for 10-20x what they paid.
Or the classic case where PE buys it, cuts services and all the staff who know anything about the product, go hog wild trying to sell software and realize that that the market isn't there and never was and the services path actually was the only the way to make inroads. The investment craters and everybody loses money.
- nugget 9y agoCertainly, there is always risk of poor strategy and/or poor execution, with an outcome exactly as you describe. Having seen both scenarios play out however (as both an investor and an operator), in this case I think it would be the right move.