What Happens When A PRIVATE EQUITY Firm ACQUIRES A Company

What is the first thing that a private equity firm does after acquiring a company?

Private equity investors used to be berated for their treatment of companies they acquired.

They would often take on too much debt, lay off workers and sell the company's most valuable assets.

Nowadays, the industry has changed a lot.Now they have a specific plan to make the business they acquire more valuable.

Listed companies have a more challenging time executing this strategy due to the pressure of meeting shareholders' diverse expectations and managing market speculation.

The most essential point to remember is that today's private equity firms aim to improve a firm's value via strategic and operational improvements.

#privateequity #companyacquisition #mergersandacquisitions

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[aek]

Private equity employees generally have no clue how to run a business. They simply procure huge loans against the assets of the company, grow the hell out of the company, cut costs (not just the fat, the muscle as well) to boost EBITDA as much as possible then sell a completely battered company

[MrAlwaysBlue]

You ignore the effect on employees. The company I work for was successful with contented employees. The shareholders sold out to PE.
Pay has now dropped 25% in real terms over last six years. During this time, investors given dividends financed by the pay cuts.

[thomaseaves]

I worked as Commercial Finance Manager for a company that was bought by a private equity business.
I was CFM for the uk business, with a circa £400m turnover, this was in the construction sector, the business as a whole had a turnover of over €6.5bn.
It was quite an experience.
13 week Cash flow reports were discussed on a weekly basis, and as anyone in the construction sector will know, that weekly blips do occur, however, it really did become a war and peace, with the supporting commentary required in such micro detail.
This was also, during the Carillon debacle. I feel a proper detailed drains up on that particular debacle would make the curling viewing, if anyone needs input on that, do get in touch.

[alelectric]

It means they are going to strip the assets and use the company as collateral to take out loans against the company. Fire non productive staff. Keep the owner around until they start pushing back then fire them as well. Not knocking it just sayin.
If you’re an employee at a company that has been sold to one these firms you should start looking for a new job.

[nqvmivv]

at 6.31 misspelled running with runnig of business.

[actionjack]

He makes destroying my business sound WONDERFUL....

[theultimatereductionist]

How does any of this help new businesses run by 1 person?

[joespinella]

Just found out my employer whom was family owned. Sold to a PEF. Im not one bit happy about it.

[joblakelisbon]

Sure. City workers typically have zero clue about running companies or businesses.
It's like asking a mechanic to perform surgery.

[solonkazos]

I invented a new jet engine. It will cut fuel use in half. Who should I talk to about that?

[sojibrajii]

Hi,
Are u need attractive YouTube thumbnail designer?

[ilikebudlite]

This is the most incorrect video on YouTube. You are on the payroll of some shady people