private equity firms (1 Viewer)

[mick]

in 2017 or 2018 a private equity firm purchased the small MN based airline Sun Country Airlines.......the airline had experienced difficulty in the past, then was eventually sold to a private
family who was the owner of Cambria (countertops). i thought that family was doing very well. fair cost, medium level comfort flights to most warm climates and other from MSP.
not sure what prompted it, but suddenly they sold to a private equity firm in NY. the airline made changes and became a stripped down, low cost, smaller seats, no frills carrier. this last year during covid the airline
made an agreement with amazon to haul freight for them, and i now believe amazon may be a minority owner in Sun Country. I don't know what to make of all of it. I still use them frequently and
can not say anything bad about them. we'll see what the future brings. we need all the competition we can get up here flying out of MSP, i hope Sun Country with it's main hub at MSP survives.

 

[mikebcurve]

private equity is quite the new model these days. it's amazing how many businesses are held by them, in all sectors, and they're certainly not in it to break even.

I moved this over here where it is more appropriate.

I can speak from my experience.

A lot of private equities treat acquired businesses like a house flip. They pump the company up no matter how it has to happen. As long as it appears to have consistent growth they can unload it on the biggest sucker.
The company I worked with was a family business for almost 65 years. I remember when all the family members disappeared and management brought in were all outsiders. Within a few years a private equity took it over. You would not believe the play with numbers. I would point out incorrect and skewed data at meetings to the point I had high up managers nudging me prior to them appearing on the screens as if to beg me to keep quiet. They even had a 53 week year to meet sales goals. A lot of shady stuff going on.
This company had their first $100 million sale year less than 5 years prior to selling for $321 million. It is depressing to look back at the years I and others spent building a business only to have this private equity treat everyone like garbage. They cashed out after cheating all of us out of money with restructuring, ignoring the business agreement we had with them and flat out not paying correctly. I dropped them over a year before they sold to the current owners. I was continually told to hang on because with new owners we would have to be paid 5 to 1 in order to get rid of us. I told this person there is no way that would happen considering the way they were currently doing business. It was sold and the few people left after me had to get a class action suit against the equity for not paying the agreed amount just as I expected.
The current owners changed the business model thinking they could cut out the middleman and save money. You can hardly find this product anymore and when you do it has a very limited selection.
What the current owners paid $321 million for I have no idea. The brand name is worthless. The current owner could have saved a ton of money setting up their own production and sell much more using their nationally recognized name.

 

[TSK]

The company I retired from in 2016 was purchased by a private equity firm about three years prior. Once the purchase was finalized, the guy who initially set up the company was forced out. But that was a good thing. A new guy was brought in to get things in order. I had no complaints about the new boss. But, a couple of the executives he hired were not exactly some of my favorite people. I had earned a merit raise and my boss told me it went through. Two days later he came back and said the new CFO denied the increase.
It was then I decided to early retire at 62. I had intended to stay at least until I hit 65. But, not getting the increase just helped push me to retire early. I had been with the company from the first day it was formed. I retired two days short of my 26th anniversary with them and went to the Fall Nationals at Ennis the day after I left.

 

[mikebcurve]

in 2017 or 2018 a private equity firm purchased the small MN based airline Sun Country Airlines.......the airline had experienced difficulty in the past, then was eventually sold to a private
family who was the owner of Cambria (countertops). i thought that family was doing very well. fair cost, medium level comfort flights to most warm climates and other from MSP.
not sure what prompted it, but suddenly they sold to a private equity firm in NY. the airline made changes and became a stripped down, low cost, smaller seats, no frills carrier. this last year during covid the airline
made an agreement with amazon to haul freight for them, and i now believe amazon may be a minority owner in Sun Country. I don't know what to make of all of it. I still use them frequently and
can not say anything bad about them. we'll see what the future brings. we need all the competition we can get up here flying out of MSP, i hope Sun Country with it's main hub at MSP survives.

I pulled up Sun Country’s Wikipedia page. I would assume their past financial woes are behind them with the current Amazon deal.
Further digging found that Tom Petters of the former Petters Group owners was convicted of stealing $2 billion in a Ponzi scheme in 2009. It’s crazy to me that companies this big can can get away with such massive fraud without anyone noticing until it’s too late.

 

[mikebcurve]

The company I retired from in 2016 was purchased by a private equity firm about three years prior. Once the purchase was finalized, the guy who initially set up the company was forced out. But that was a good thing. A new guy was brought in to get things in order. I had no complaints about the new boss. But, a couple of the executives he hired were not exactly some of my favorite people. I had earned a merit raise and my boss told me it went through. Two days later he came back and said the new CFO denied the increase.
It was then I decided to early retire at 62. I had intended to stay at least until I hit 65. But, not getting the increase just helped push me to retire early. I had been with the company from the first day it was formed. I retired two days short of my 26th anniversary with them and went to the Fall Nationals at Ennis the day after I left.

I’m sure you were told the denied increase was business, not personal. I always loved that one. It can be unfair but it’s just business, right? lol

 

[Butch]

I’m sure you were told the denied increase was business, not personal. I always loved that one. It can be unfair but it’s just business, right? lol

Isn't that what Michael Corleone said?

 

[mick]

it's not personal sonny, it's strictly business........mike is in father's study talking to sonny, klamenza, and sali (sp?) concerning a meeting with
the crooked policeman and tatallia. a retaliation move for the attempt on don corleone's life....... good lord the hours i have wasted watching no.1 and no. 2