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>..these companies were recently bought by private equity firm KKR Co Not KKR. In 1995, Borden was acquired for $2 billion by Kohlberg Kravis Roberts & Co. (K

by achow 7y ago

>..these companies were recently bought by private equity firm KKR Co Not KKR. In 1995, Borden was acquired for $2 billion by Kohlberg Kravis Roberts & Co. (KKR), which proceeded to sell off pieces of the company to various buyers. Washington, D.C.-based ACON Dairy Investors, LLC purchased the company in 2017. https://www.bevnet.com/news/2020/borden-dairy-co-files-for-bankruptcy https://www.bevnet.com/news/2020/borden-dairy-co-files-for-b... [Edit] Not sure whether the twitt narrative is correct. From mundane wiki looks like KKR tried to right the sinking ship.. Borden suffered significant losses for the period 1991-1993...In deep financial difficulty, Borden was bought out by Kohlberg Kravis Roberts (KKR) in 1995. KKR increased the pace of divestiture, but was unable to right the company... In 1997, KKR focused the company solely on its pasta and pasta sauces lines. But the new strategy failed as well.. https://en.wikipedia.org/wiki/Borden_(company) https://en.wikipedia.org/wiki/Borden_(company)

dmix 7y ago
There have been studies showing private equity does more good for dying businesses than bad. Congress attacked them heavily during the 2008 crisis and they were the first companies called in to congress to answer "tough questions". But it turns out they didn't cause the crisis and that more companies are better off after PE acquisition (ie, they got turned around for the better and created greater economic production had they not existed). Basically most of those companies would be dead without PE as they are often the only solution left, even if it often seems on harsh terms. Private equity firms aren't all just corporate raiders of the 1980s that certain politicians try to spin them as. That's not to say that small towns selling off public services to them is a good idea. Or any other public/private partnership bullshit that is sold as 'free markets' when its the mostly just politicians and their wealthy connections being complete vultures creating things that are nothing like markets. The book "King of Capital" has a really good overview of the history of private equity: https://www.amazon.com/King-Capital-Remarkable-Schwarzman-Blackstone-ebook/dp/B003E8AJXI https://www.amazon.com/King-Capital-Remarkable-Schwarzman-Bl...
- throwaway5752 7y ago
  They do really awful things, too, and they are rewarded outrageously for it with very little personal risk. Taking a 10x levered loan to pay for a company, transferring the debt to them, and cutting the company loose after paying yourself a dividend that more that covers your loan principal has nothing noble about it at all. I don't want to be acquired by them, but I have much more respect for shops like Thoma Bravo that act as operators and acquire strategically for portfolio companies that places like Bain, for example.
  - dmix 7y ago
    I personally don't care much for defending shitty Wall St companies nor LBOs, I just wanted to point out that a lot of FUD surrounding Private Equity is simply that, FUD. There are a lot of bad players or stupid businessmen and politicians in municipalities who have given it a bad name by making dumb exploitative deals. Which I do not condone or wish to defend. But PE has still done a lot of good turn arounds and has been proven via plenty of data to be a net-gain in terms of its economic contribution to society, saving plenty of jobs and American companies that were headed for certain death. Companies within all industries always vary in quality, but I think it's silly and dangerous to define entire industries merely by a small group of it's worst players - like the way people have been trying to pin the entire Silicon Valley industry to Ubers and Theranos, or Google/FB acting poorly, despite is otherwise countless success stories. This sort of thinking, political spin, and media coverage is what creates destructive gov policies aimed at the few small minority of big bad guys but often ultimately just harms the other 90% of mostly harmless good guys with needless hoop jumping or straight up banning of otherwise useful contributions to society (which there have been countless examples of such self-destructive - but of course well intentioned - policies driven by similar emotional reactionaryism). PE has been a punching bag for a long time. My only wish is that it is done rationally and using an evidence based approach. Politics has a habit of stirring up hysteria with stuff like this, disconnecting it from the reality on the ground, which LBOs and PE certainly has a longstanding legacy of, which you can see thoroughly in this thread. It's hardly new. But yes of course it is an industry notorious for its leeches and one that should be treated carefully, not with white gloves. Just remember the worst stories take up 90% of the headlines, the countless successful ones often happen quietly, or in less read retrospectives or books. The stuff that rarely tops Reddit or HN, so it's easy to assume that all companies doing LBO are evil blood sucking monsters if you don't pay close attention.

by achow 7y ago

dmix 7y ago

There have been studies showing private equity does more good for dying businesses than bad. Congress attacked them heavily during the 2008 crisis and they were the first companies called in to congress to answer "tough questions". But it turns out they didn't cause the crisis and that more companies are better off after PE acquisition (ie, they got turned around for the better and created greater economic production had they not existed). Basically most of those companies would be dead without PE as they are often the only solution left, even if it often seems on harsh terms. Private equity firms aren't all just corporate raiders of the 1980s that certain politicians try to spin them as. That's not to say that small towns selling off public services to them is a good idea. Or any other public/private partnership bullshit that is sold as 'free markets' when its the mostly just politicians and their wealthy connections being complete vultures creating things that are nothing like markets. The book "King of Capital" has a really good overview of the history of private equity: https://www.amazon.com/King-Capital-Remarkable-Schwarzman-Blackstone-ebook/dp/B003E8AJXI https://www.amazon.com/King-Capital-Remarkable-Schwarzman-Bl...

throwaway5752 7y ago
They do really awful things, too, and they are rewarded outrageously for it with very little personal risk. Taking a 10x levered loan to pay for a company, transferring the debt to them, and cutting the company loose after paying yourself a dividend that more that covers your loan principal has nothing noble about it at all. I don't want to be acquired by them, but I have much more respect for shops like Thoma Bravo that act as operators and acquire strategically for portfolio companies that places like Bain, for example.
- dmix 7y ago
  I personally don't care much for defending shitty Wall St companies nor LBOs, I just wanted to point out that a lot of FUD surrounding Private Equity is simply that, FUD. There are a lot of bad players or stupid businessmen and politicians in municipalities who have given it a bad name by making dumb exploitative deals. Which I do not condone or wish to defend. But PE has still done a lot of good turn arounds and has been proven via plenty of data to be a net-gain in terms of its economic contribution to society, saving plenty of jobs and American companies that were headed for certain death. Companies within all industries always vary in quality, but I think it's silly and dangerous to define entire industries merely by a small group of it's worst players - like the way people have been trying to pin the entire Silicon Valley industry to Ubers and Theranos, or Google/FB acting poorly, despite is otherwise countless success stories. This sort of thinking, political spin, and media coverage is what creates destructive gov policies aimed at the few small minority of big bad guys but often ultimately just harms the other 90% of mostly harmless good guys with needless hoop jumping or straight up banning of otherwise useful contributions to society (which there have been countless examples of such self-destructive - but of course well intentioned - policies driven by similar emotional reactionaryism). PE has been a punching bag for a long time. My only wish is that it is done rationally and using an evidence based approach. Politics has a habit of stirring up hysteria with stuff like this, disconnecting it from the reality on the ground, which LBOs and PE certainly has a longstanding legacy of, which you can see thoroughly in this thread. It's hardly new. But yes of course it is an industry notorious for its leeches and one that should be treated carefully, not with white gloves. Just remember the worst stories take up 90% of the headlines, the countless successful ones often happen quietly, or in less read retrospectives or books. The stuff that rarely tops Reddit or HN, so it's easy to assume that all companies doing LBO are evil blood sucking monsters if you don't pay close attention.