If you want to understand what went wrong with America, start with private equity
Nah, many countries have it. If people have a damn it would be a different story but in the US, cheaper is always better. See architecture, food, housing, hotels...
Private equity is buying everything from vet offices to tech conglomerates
141–150 of 362 posts
Re: Private equity is buying everything from vet offices to tech conglomerates
#142I fucking hate the financial system
Re: Private equity is buying everything from vet offices to tech conglomerates
#143Earlier quoted context omitted.
PE acquired us and was a great partner. Allowed us to do larger M&A deals than we otherwise could have. Supportive but mostly stayed out of the way. Never suggested any cuts or anything that would impact culture. Ultimately led to us being acquired by a strategic a few years later in what I think was a good outcome for everyone. These are all just anecdotes. My experience doesn't override yours, but I'd be careful dr…
My firm supports 100's of PE acquisitions every year and I can tell you that your experience is far more the norm than what the parent comment has suggested.
Growth equity blurs the line between traditional PE, on one hand, which spans buying and responsibly operating good companies to LBOs, which require cuts, and venture capital, on the other hand, which is more hands off but also more brutal if you don't look like you're flying moonwards. This ambiguity as to what "private equity" is might be clouding the data.
Re: Private equity is buying everything from vet offices to tech conglomerates
#144A friend of mine is a Vet at a place recently sold to a PE firm. If your wait times are crazy long, if you can't get through on a phone, if you realize your vet's office has parted ways with the great vet you used to see -- that's the PE firm counting beans and destroying the service for customers in an effort to squeeze every dollar out of the system. As a specific obviously bad example -- Vet services in California…
My wife is a vet for a corporate owned hospital and our circle of friends are naturally very vet centric. They run the gamut from PE vets, corp vets, and private owners. We know GPS, specialists, dogs and cats only, large animal, exotics. What you are describing is not PE specific. Staffing issues, primarily technicians, have hit everyone across the board. It’s a combination of wages, training, quality of life. Moreo…
I dated a vet tech several years before COVID and it sounded like a horrendous job. $20/hr was considered good pay, you're constantly bending over, pickup up things (sometimes things that definitively do not to get picked up), and you're literally dealing with some of the shittiest parts of animal care.
Re: Private equity is buying everything from vet offices to tech conglomerates
#145Earlier quoted context omitted.
The idea that PE comes in and sets eight figures of their own money on fire and ruins a business, shooting themselves in the foot makes no sense, yet every other story online is about them doing exactly that. Of course there are LBO scams going on (more historically rather than currently) but these billion dollar firms don't come in and lose a ton of their own money along with money of their outside investors on a re…
Isn’t LBO the norm in industry? Where they charge from the acquired company and the acquired company takes on a huge loan?
> Isn’t LBO the norm in industry?
No, it's one of many PE strategies. Almost all private equity firms utilize leverage in some form, but it's not universal and certainly not as extreme in all cases as the LBO shops.
Re: Private equity is buying everything from vet offices to tech conglomerates
#146Earlier quoted context omitted.
It's not always like this. A PE bought a majority stake in the company I work for which for 40 years was a family owned company. They said they were financial partners only, non-operational and they bought because they liked how we were. It's been years since and things have only gotten better as far as I am concerned. I mean they were pretty great originally when the family owned it and I had no complaints, but the…
that is the Warren Buffet model.. who can complain? not everything goes that way.. congrats on the successful transition
Just from what I hear it seems like most go bad. Though I have to assume it's also a case of people are more inclined to complain when things go poorly.
I mean why would people write comments about how such a thing went smoothly and well. People do now and again but not usually spontaneously.
Part of why I felt I should share my own experience. Hard to know what % of PE acquisitions the workers end up liking vs. hating, but I bet it's not as many bad cases as it seems from media or online comments.
Re: Private equity is buying everything from vet offices to tech conglomerates
#147Earlier quoted context omitted.
"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.
Sure! But that cuts into the "keeping retiring doctors happy" piece. If your practice is worth $15 million but you only get 50c on the dollar because there is no buyer pool, you might be pretty grumpy. To the broader picture though, this is a double edged sword if you want more private family practices. Less doctors are going to go through the work and cost of starting their own business if they have to take a haircu…
> If your practice is worth $15 million
What on Earth makes a single-doctor practice worth $15 million when that doctor leaves? Or even $5 million, or even $1 million?
The patient list? It's a zero-sum game! Are these patients just going to stop getting medical treatment when their doctor retires? Or are they just... Going to go to the next clinic over?
There's something rotten here, and it's not PE buying practices. It's that the practice is worth much beyond the value of the particular physician working in it! If you're wondering why medical costs are ballooning in this country, shit like this is one of the contributors!
Re: Private equity is buying everything from vet offices to tech conglomerates
#148Despite 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…
> A doctor knows what his practice is worth and wants every cent he can get out of it - but the next generation of doctor is not going to be able to compete with debt financing what a PE cash-buyer can get. In my opinion, the physician in this example is a monster. Profit maximization is a choice, not some kind of moral imperative. Am I supposed to have any respect for somebody selling out their employees and patient…
> Am I supposed to have any respect for somebody selling out their employees and patients to vampires so they can retire to a beach
Nobody else will buy it. The alternatives are shutting down the practice or forcing oneself to keep working. Particularly in medicine, the latter is dangerous.
> solution I'd want to see for situations like this is to find a way to sell to the people who have a continuing interest in how the business is run
Sounds like a buy-out strategy! Seriously. Berkshire Hathaway could negotiate good deal terms by making this promise.
Re: Private equity is buying everything from vet offices to tech conglomerates
#149I literally tasted a PE takeover once.
Those of you in Britain might remember a burger chain called Ed's Easy Diner. They had a shop in Soho, served really good "American" burgers and shakes. So good I used to yearn for them after I left the country.
I came back after a few years, and found they had expanded. I excitedly took my family to eat at one of the new branches.
I took one bite of what appeared to be my old favorite, spat it out, and immediately reached for my phone. The burger was now made of gristle instead of meat, other ingredients were worse, and the shake was not too nice either.
Indeed, it had been bought out not long after my previous visit.
Re: Private equity is buying everything from vet offices to tech conglomerates
#150It's interesting reading all of the stories of PE firms destroy businesses.
I've had those experiences, but I've also had the opposite experience. I used to work for a regional internet service provider/cable/phone company that was owned by PE. They poured a ton of resources into the business, improved our processes and standardized things so that we could expand to more regions.
Then they sold us for a nice chunk of money (for themselves, but employees got better pay and benefits under the new company). The new parent used our practices as the model to use across the whole business.
It was a good deal.