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> Hellman & Friedman and Permira have arranged for debt and equity financing commitments So the way this is worded, this is a leveraged buy out? If so worst ca
by shmatt 4y ago
> Hellman & Friedman and Permira have arranged for debt and equity financing commitments
So the way this is worded, this is a leveraged buy out? If so worst case scenario for anyone involved. Employees and customers. I wonder why the board would approve such an odd move for tech
- mathattack 4y agoIt is an LBO. The board approves because they have to get the highest price, and LBOs usually pay cash. It’s a natural move when companies can’t invest in profitable growth any more. At that point it’s time to start returning money to shareholders who can invest it elsewhere. They have to change how they operate and management teams (and their playbooks) that optimize for growth are different than optimizing for returning cash to shareholders today. One long term way to do this is the IBM model of continuous underinvestment, layoffs and share buybacks. A company can accomplish this more quickly with an LBO and new management team.