4 ms·

Curious to hear success stories you can share from leveraged buyouts.

• JumpCrisscross 3y ago
  See AxleTech [1]. Broadly, buy-out comes in three flavours: vulture, where you buy a failing business and try to turn it around or get a last puff out (Toys ‘R’ Us); unlevered, where you provide convenient exit (Berkshire Hathaway); and growth, basically beefed-up VC (Silverlake). Vulture gets paid for creative destruction. The company was going down, they come in with capital and try something crazy, it probably doesn’t work, in which case they get bad headlines and keep the asset value. Unlevered gets paid to help steady-state businesses exit. Growth gets paid to provide capital so existing management can focus on their plan. The latter two get less press than the first. (Read the story. Do you want one on an aerospace components manufacturer or Fresno-area cold-rolled steel roll-up next? This doesn’t sell clicks.) Put another way: vulture is value investing, growth is growth investing and unlevered is dividend chasing. [1] https://www.npr.org/templates/story/story.php?storyId=12571719 https://www.npr.org/templates/story/story.php?storyId=125717...