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Software Engineer here working on GotoMeeting (throwaway account). Not having gone through a private equity buyout in my career before, any ideas of what to exp

Software Engineer here working on GotoMeeting (throwaway account). Not having gone through a private equity buyout in my career before, any ideas of what to expect/any recommendations of what to do now?

deleted 7y ago
[deleted]
criddell 7y ago
Has any private equity buyout ever helped anybody other than the PE stakeholders?
- ronnybrendel2 7y ago
  Dell was saved that way. But this here is different of course.
et-al 7y ago
They'll give you a shpiel how this is for the best and that brighter days are to come with new management. Maybe they'll entice folks with an incentive program that says "if profits are x much, you'll get a bonus in 2 years." Then within 18 months, they'll reduce benefits (e.g. worse insurance plan, change the vacation policy), or maybe actually lay off people and shut down entire departments to boost numbers. tl;dr - update your a resume and start interviewing to have a backup. If upper management thinks you're a top performer, you have a bit more leeway.
thr483900 7y ago
Bye bye Jive.... Great day for competitors in the VOIP space.
anonuser123456 7y ago
PE cares about value. If you bring a lot of value (e.g. work on revenue generating projects), you stand to do well. Speculative R&D work is not highly valued, that's what VC does. SG&A tends to get hit the hardest (HR/Finance/Legal etc.). Non core business functions get outsourced. Look at the existing portfolio and see where you for in.
xnyan 7y ago
In their mind, they bought a $4.3 billion orange and expect to make more than $4.3 billion worth of orange juice from it. If you want to find out what it feels like to be inside of an orange that’s being squeezed for $4.3 billion plus value, stick around.
lmiemployee 7y ago
Another LMI engineer here. The deal itself would take place next year anyway. Any restructuring would be late 2020/early 2021 the earliest. The deal provides an $86 exit for every single shareholder (including employees & managers who own shares). Not saying no to such an offer makes sense, but it also implies that nobody is really convinced that these stocks will ever be worth, say, $100. All-time top was $120 in early 2018, since then the price plummeted and has been moving sideways. If looking from this perspective - how does this PE firm plan to make money, especially that the deal implies that most shareholders don't expect this stock to rise by any means, which is a bad sign for any kind of publicly traded company? These PEs would buy the company for ~$4bn. Last year's EBITDA is was just short of $400M - probably they don't want to wait 10+ years for their investment to pay back. Maybe they will try to 'restructure' (i.e. cut expenses where possible, split the company into multiple companies along business units, deprecate some products), get as much profits as possible in the upcoming years and then try to sell the whole thing again to e.g. a tech company. Of course this is just speculation, but keeping things 'as is' simply wouldn't generate enough returns to justify the all-cash investment.

deleted 7y ago

[deleted]

criddell 7y ago

Has any private equity buyout ever helped anybody other than the PE stakeholders?

ronnybrendel2 7y ago
Dell was saved that way. But this here is different of course.

et-al 7y ago

They'll give you a shpiel how this is for the best and that brighter days are to come with new management. Maybe they'll entice folks with an incentive program that says "if profits are x much, you'll get a bonus in 2 years." Then within 18 months, they'll reduce benefits (e.g. worse insurance plan, change the vacation policy), or maybe actually lay off people and shut down entire departments to boost numbers. tl;dr - update your a resume and start interviewing to have a backup. If upper management thinks you're a top performer, you have a bit more leeway.

thr483900 7y ago

Bye bye Jive.... Great day for competitors in the VOIP space.

anonuser123456 7y ago

PE cares about value. If you bring a lot of value (e.g. work on revenue generating projects), you stand to do well. Speculative R&D work is not highly valued, that's what VC does. SG&A tends to get hit the hardest (HR/Finance/Legal etc.). Non core business functions get outsourced. Look at the existing portfolio and see where you for in.

xnyan 7y ago

In their mind, they bought a $4.3 billion orange and expect to make more than $4.3 billion worth of orange juice from it. If you want to find out what it feels like to be inside of an orange that’s being squeezed for $4.3 billion plus value, stick around.

lmiemployee 7y ago

Another LMI engineer here. The deal itself would take place next year anyway. Any restructuring would be late 2020/early 2021 the earliest. The deal provides an $86 exit for every single shareholder (including employees & managers who own shares). Not saying no to such an offer makes sense, but it also implies that nobody is really convinced that these stocks will ever be worth, say, $100. All-time top was $120 in early 2018, since then the price plummeted and has been moving sideways. If looking from this perspective - how does this PE firm plan to make money, especially that the deal implies that most shareholders don't expect this stock to rise by any means, which is a bad sign for any kind of publicly traded company? These PEs would buy the company for ~$4bn. Last year's EBITDA is was just short of $400M - probably they don't want to wait 10+ years for their investment to pay back. Maybe they will try to 'restructure' (i.e. cut expenses where possible, split the company into multiple companies along business units, deprecate some products), get as much profits as possible in the upcoming years and then try to sell the whole thing again to e.g. a tech company. Of course this is just speculation, but keeping things 'as is' simply wouldn't generate enough returns to justify the all-cash investment.