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Private equity is buying everything from vet offices to tech conglomerates

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Re: Private equity is buying everything from vet offices to tech conglomerates

#51

Post by jarym »

Not just in the US either - in the UK my local gym (part of a national chain) that I've been with for over a decade got bought by a PE firm. In 18 months the fees went up over 60%. They used to give out regular guest passes - now only 1-2 passes once a year and they're valid for less time than they used to be. They've also doubled the charges for bringing a guest.

All these price increases and while the staff are still nice, the gym is now overcrowded and many times there isn't any equipment available. Also, there is dust on almost all the equipment - like a thick layer, clearly the only thing being regularly cleaned is the floor.

Naturally, I am looking to go elsewhere but my impression of PE as a consumer based on my personal experience is quite negative.

Re: Private equity is buying everything from vet offices to tech conglomerates

#52

Post by basch »

toast0 wrote: post #43

Private 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 li…

Plants get pruned and brought back to life. I think there is an argument to be made that PE could be caretakers and stewards that unlock the good trapped by rot, but that might take time, so instead they extract the value immediately but destroy the life in the process. If corporations are people, my friends, they deserve some human rights of their own.

Re: Private equity is buying everything from vet offices to tech conglomerates

#53

Post by alistairSH »

addflip wrote: post #7

It'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.

The worst "foreign call center" experience I've had lately...

Hotel check-in. Walked in, lady at desk is read a novel, I ask "can I check in?", she directs me to a video-conference kiosk across the room, which is actively in-use by a high-maintenance customer who, in addition to changing her reservation details, can't understand a fairly light Indian accent. 15 minutes of waiting later, this other customer is still going around-and-around with the call center guy (who's being nothing but patient and trying his best with the system provided), the lady at the desk, rolls her eyes, harrumphs, and asks if I want to check-in with her instead.

Re: Private equity is buying everything from vet offices to tech conglomerates

#55

Post by hotpotamus »

SNosTrAnDbLe wrote: post #5

I have firsthand experience of how PE ruins startups. We were a small startup and unfortunately our founder decided to go with a PE firm rather than a VC firm for a round of funding. The latter were upfront about job cuts but the PE firm did not say anything until them took over. The founder got a good paycheck but we were left holding the bag. There was a bloodbath and they ruined the culture, the product and the mo…

I believe they prefer the term "sharp-elbowed", but either way, you can imagine why so many were not interested in having Mitt Romney as a national leader.

Re: Private equity is buying everything from vet offices to tech conglomerates

#56

Post by linuxftw »

toast0 wrote: post #43

Private 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 li…

The problem lies in where the money comes from the execute taking the company private. A big bank will issue the debt, then peddle the debt as AAA rated into all of America's 401k's via their friends at the brokerages. You think the banks are just sitting on those debts hoping to make it to maturity?

And it's never the PE firm that owes the debt, they're able to get paid back by the thing they buy, and that shell owes the debt. The losses are socialized among the public.

Re: Private equity is buying everything from vet offices to tech conglomerates

#57

Post by pierat »

Avshalom wrote: post #32

Just bankrupted instant pots and pyrex too https://edition.cnn.com/2023/06/13/business/instant-brands-b...

> Instant Brands was purchased by private equity firm Cornell Capital in 2017.

And although https://cornellcapllc.com/investments/ provides the shell companies they own, who knows what's under each of those shells, and under those shells.

Re: Private equity is buying everything from vet offices to tech conglomerates

#58

Post by verteu »

toast0 wrote: post #43

Private 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 li…

> who's really got standing to object?

Other stakeholders, such as government regulators or the extra patients killed when PE takes over their hospitals and nursing homes [1].

[1] https://www.nber.org/papers/w28474

Re: Private equity is buying everything from vet offices to tech conglomerates

#59

Post by dwallin »

legitster wrote: post #40

Despite 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…

"there is no one else right now who would buy it."

You are missing a qualifier: "at the current market price."

If you prevent or disincentivize PE from buying these types of businesses, the price would drop to the level of its new adjusted demand.

Re: Private equity is buying everything from vet offices to tech conglomerates

#60

Post by ARandomerDude »

hospitalJail wrote: post #4
awaythrow483 wrote: post #3

If you want to understand what went wrong with America, start with private equity

Lobbying/Bribery seems more egregious than investing. At least investing has some economic forces that cause people to conserve resources and allocate them better than prior. Lobbying/Bribery is just pure corruption. The medical industry is so extravagant because they are among the top lobbyists of all time. Only the entirety of real estate or all US businesses(chamber of commerce) can even compete with merely the Am…

Don’t forget teachers unions and the Dept of Ed.

They bleed taxpayers dry because they are “helping the children” and everybody knows a nice teacher who isn’t part of the problem but will be held out as a defense of govt and union corruption.

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