By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Kasz216 on 29 October 2012
Edit Thread
Ail said:
Kasz216 said:
Ail said:
Kasz216 said:


Except you know... all the companies that have done it that were going to go out of buisness... and now are still in buisness.

Also... it has happened with public companies.

I believe Safeway was one of them.

Not every company taken over by private equity is necessary a company that was going out of business....

Private equity take over companies when the stock price is attractive and not every company with a low stock price is necessary heading for bankrupcy...


The ones that get purchased with LBO's tend to be.

Burger King, Toys R US, Michael's stores, Dunkin Donuts were all purchased by Bain, none of those were in bad shape or heading for bankrupcy when it happened. Granted they were not the best performing in their sector, but they were not bleeding money either... Burger King and Michael's stores were LBO, not sure about the 2 others...

To start with Burger King totally was heading towards bankruptcy in 2002.  In 2002 the AmeriKing inc went out of buisness.  Which was the biggest burger King Franchise company they had.

http://www.qsrmagazine.com/news/ameriking-inc-will-undergo-financial-restructuring

The Burgerking buisness model was falling apart.  They were losing money hand over fist and their owners were trying to dump them.   Then Bain Capital came in and turned them around and they made some profits... well until the financial crisis tanked Burger King... leading the company towards huge loses and heading towards bankruptcy again.

Which is why it was sold to another firm.

Actually making it another one of those Public company taking a leveraged buyout.  Since it was put on the market at the time.

 

Can't talk for Michaels... but it looks like they were another public company that took a LBO... and that the company looks like it's about to go back on the market as an IPO... with 100 more stores and way more profits... and a valuation at double what the company was bought for.

http://blogs.wsj.com/deals/2012/07/06/ipo-for-crafts-retailer-michaels-on-hold-indefinitely/