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Honest question: Are there successful cases where a PE takeover has transformed the company that has helped the company's mission?
by xtacy 2y ago
Honest question: Are there successful cases where a PE takeover has transformed the company that has helped the company's mission?
- beardedwizard 2y agoI can't think of one. The most determined brands sometimes buy themselves back from PE - a recent example is Wahoo
- wiether 2y agoWell, hello fellow endurance person!
- blakesterz 2y agoMaybe Barnes and Noble? https://www.theverge.com/23642104/barnes-and-noble-amazon-bookshop-ecommerce-decoder-podcast https://www.theverge.com/23642104/barnes-and-noble-amazon-bo... At least according to that interview, it was going well at the time about a year ago.
- bdcravens 2y agoQuite possibly, though the last time I was in B&N, earlier this year, I found it a fairly disappointing experience (though given how much they shifted shelf space to current hot genres, it's likely they are succeeding with a much different audience than in the past)
- notaustinpowers 2y agoI worked at B&N for 4 years (2 before and 2 after the sale), it actually has been pretty good so far for the business. The stores have been given much more creative control over what they stock so it takes advantage of what's popular at that location (my location was known for our manga and young adult variety). There have been some bad moves taken at the corporate level (cutting the book procurement team, massive reductions in corporate headcount, etc). This makes the stores have to be a lot more self-reliant and increased workloads. Pay kinda increased, but is still way below the average for retail. Ultimately, it's good for the business, but it's not as great of a place to work at anymore. When I started, the average non-managerial employee tenure was 6 years, now it's only 2 years there.
- ekidd 2y agoUsually my rule of thumb at work is that if a key SaaS vendor gets bought by private equity, we start planning a migration project. We just about always wind up needing one, as the private equity firm tries to milk customers for all they're worth while degrading service.
- RandomCitizen12 2y agoMaybe Dell in 2013. But the point of PE buying a company is so that the company can help PE's mission, not PE helping the company's.
- mdorazio 2y agoThe "good" ones I know of tend to be smaller deals where the PE firm is pursuing a buy-and-hold approach in a sector where it has some knowledge and advantage. For example, Summa Equity bought Norsk Gjenvinning in Norway (a recycling company), refocused it on circular economy practices, and by most metrics it seems to be doing well for everyone. The Keiretsu companies an Japan are another example of the process working fairly well. On the flip side, the high-profile "pump and dump" PE deals almost always seem to be bad for everyone but the PE firm and shareholders.
- coredog64 2y agoOn Semiconductor was spun out of Motorola at the height of the dot com bubble. Their primary business at the time was commodity parts, a capital intensive and cyclical industry. At their lowest, TPG became a majority shareholder and strongly influenced operations. The initial plan was a quick fix, but TPG saw opportunity and helped OnSemi make the jump up the component food chain. A major part of this was the low cost structure that TPG drove. This then allowed for cheaper credit options which freed up money for M&A.
- rs999gti 2y agoHilton - https://www.investopedia.com/ask/answers/050415/what-are-some-examples-successfully-executed-leveraged-buyouts.asp https://www.investopedia.com/ask/answers/050415/what-are-som... Hilton was in trouble after 2008 crisis. Blackstone purchased them as a lifeline. Under Blackstone, Hilton reorganized itself and then Blackstone sold them off.