Vulture capitalists are bad, but at least sometimes they can fund something decent. PE is full of scammers and criminals that honestly should be behind bars because their entire existence involves destruction. It should be blatantly illegal to buy a company and saddle it with the debt you used to buy it.
Private equity is buying everything from vet offices to tech conglomerates
41–50 of 362 posts
Re: Private equity is buying everything from vet offices to tech conglomerates
#42Earlier quoted context omitted.
Well, they aren’t really forcing the company to do anything. The original owners agree to the sale which is financed by debt that is secured by the business. The other non-owner stakeholders (employees, customers) may not enjoy this new deal but that is the reality with any new owner of a business. Of course, it is crappy when this results in negative experiences for them but at the end of the day, employees are free…
So you're saying that technically , it isn't what it looks like it is. That technically , TRU is buying itself. That technically KKR isn't actually the new owner. Technically, it's still predatory.
The business isn’t “buying itself” any more than a house does when you purchase it. The debt is just placed against the assets (real assets and cash flow). The business has owners. It doesn’t “own itself”.
I don’t think it is predatory at all. A leveraged buyout is a pretty fundamental and common strategy across all business types and sizes.
Don’t hate the strategy of buying a business with debt, hate the players that execute it like assholes.
Re: Private equity is buying everything from vet offices to tech conglomerates
#43Private equity leveraged buyouts are an option for companies to change their fate. Typically, they're on a long path towards an slow death. With the buyout, current shareholders get a return, and the company is on a 3-7 year path towards a crisis bankruptcy.
It's good for the current shareholders, and it's good for the private equity company. It's not good for the business, but if the old owners and the new owners like the deal, who's really got standing to object? How do you force a business to continue to operate in spite of the business being unsustainable and ownership wanting out?
Employees don't like it, but the business is already on a path to death, so whatcha gonna do there? It's probably better for employees if Toys R Us closes stores every year for many years, instead of all of them at once, but those jobs are on borrowed time either way. I'd imagine vendors don't like it, because they're going to lose in bankruptcy, but after PE takes over your client, that's a good time to reevaluate their credit and put them on a shorter leash.
Re: Private equity is buying everything from vet offices to tech conglomerates
#44Despite the directions the interviewer tried steering this conversation into, this is a really interesting interview. But when it comes to the private equity roll-ups, I think everyone is missing the forest for the trees. If you are a doctor looking to retire and sell your business there is no one else right now who would buy it . The same goes for every category of "mom and pop" business in the US. Even if you could…
sorry, thirty years ago I could have subscribed to "and keep retiring doctors happy" but now, no way Jose
Re: Private equity is buying everything from vet offices to tech conglomerates
#45Well, to be fair, doctors sold themselves out. In New Jersey and New York City, I have to explicitly state that I only want to meet with an MD and not an assistant physician or nurse practitioner. As to how this is even legal is probably explained by insurance company lobbying efforts for cost control.
Re: Private equity is buying everything from vet offices to tech conglomerates
#46I don't know the answer here, so Im asking hoping that someone may. Couldn't private equity be seen as the "ants" of the economic landscape? Scraping the skeleton companies of the world for the last bits of meat on the bone and then move on to the next?
I'd say more like some slimy poison frog, toxic, nasty and only care about themselves while smearing themselves all over the place. Looks great from a distance tho. Or, they are a self-aware trolley that eats run-over people after choosing to switch tracks to where a bunch of people are tied down. I think more similar descriptions can be found, but as for what they really are: definitely not the economy immune system…
> Or, they are a self-aware trolley that eats run-over people after choosing to switch tracks to where a bunch of people are tied down.
This is pure poetry.
Re: Private equity is buying everything from vet offices to tech conglomerates
#47PE is only good for PE and privileged shareholders.
I think they have a place, maybe in hell?
My dad used to work somewhere that got taken over by PE. He was immigrant so can’t really change jobs easily esp in that environment. Fuck those asswipes for making his work life a nightmare that eventually permeated into family life because he was always stressed out.
Re: Private equity is buying everything from vet offices to tech conglomerates
#48Well, to be fair, doctors sold themselves out. In New Jersey and New York City, I have to explicitly state that I only want to meet with an MD and not an assistant physician or nurse practitioner. As to how this is even legal is probably explained by insurance company lobbying efforts for cost control.
That hasn't been quite my experience.
I've used PAs/NPs when it was appropriate (annual physical, etc) - I don't need an MD to take a blood sample, run a blood pressure check, and read of a standard checklist of questions.
And I've seen MDs when that was appropriate (specialist procedures, things that aren't "a cold", etc).
There's room for both.
Re: Private equity is buying everything from vet offices to tech conglomerates
#49It's a shame what's happened to my local HVAC contractor. It used to be a great local operation where a real person picked up when you called. But lately, after a private equity group took over, it's all automated calls and foreign call centers. The personal touch is gone and, sadly, their service quality has taken a noticeable hit. It's just not the same anymore.
I knew some local guys that basically made a living doing that - start an HVAC company, get it working good, sell it to a equity group, they destroy it pretty quickly, everyone quits, then one of the other original guys starts a new HVAC company, gets it working good, sells it ...
Oil and Gas field services does the same thing and only
difference is they buy the company back and then flip it again.
Re: Private equity is buying everything from vet offices to tech conglomerates
#50Well, to be fair, doctors sold themselves out. In New Jersey and New York City, I have to explicitly state that I only want to meet with an MD and not an assistant physician or nurse practitioner. As to how this is even legal is probably explained by insurance company lobbying efforts for cost control.
Well, there is a nationwide (potentially global) doctor shortage.
It's not like doctors are sitting in a room twiddling their thumbs because insurance companies in the US are cheap.
Residency programs are kept artificially low through successful efforts of the AMA to intentionally limit the number of doctors in the US.