Comment by gadders
2 years ago
I need to resurrect my idea of a list of companies (especially ones that manufacture goods) that are owned by Private Equity so people can avoid them.
In most cases, the brand name stays the same but the quality falls off a cliff.
When I jokingly talk about MBA Disease being the same as Dutch Elm Disease, this is what I mean: parasitic behavior that kills the host.
On one side this is a study in destroying a chain restaurant, but what'll be taught in business school will be the other side: was this transaction profitable for one party and if so how do we repeat it? It won't be taught as a cautionary tale unless the hedge fund lost out.
Hedge Funds != Private Equity. They are two very different businesses. For starters, hedge funds don't run other companies.
I had the dubious luck to work for a company that got acquired by private equity. The company was resold for double the price it was valued when the private equity injected capital after 3 years. But during those 3 years, they lowered the quality, increased the quantity of product sold and now, no customers are excited by their product anymore.
That's an excellent idea. I posted in the thread another angle I'd love to see get traction:
https://news.ycombinator.com/item?id=40238807
I would like this service but for vet clinics, apartment rental forms, and dentists.
Instant Pot was one ...
For products it would be good to include a date so people can obtain the quality items second-hand.
Tim Hortons
They're on my lifetime ban list after PE ruined their menu.
Tim Hortons is part of $RBI [1] and not private equity.
[1] https://en.wikipedia.org/wiki/Tim_Hortons
They are (were?) 51% owned by Brazilian private equity group 3G Capital which in turn owns 1/3 of RBI: https://en.wikipedia.org/wiki/3G_Capital
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This will work until a PE firm buys you out.
Travis CI
Whataburger :(
Did this happen to Chipotle?
And then it was reversed, purchased back by the founder for less
Chipotle took on McDonalds as an early investor, used McDonald's investment to quickly expand from 16 to 500 stores. Chipotle had a tremendously successful IPO, which they used to fund further growth. McDonalds, who was always a minority investor, divested themselves from Chiptole earning $1.5 billion on a $450 million investment. It trades on the NYSE as CMG and has a market cap of 88 billion.
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VMWARE CA (Computer Associates) CITRIX ...
CA was where innovation went to die far before Broadcom. It's main business process was buying popular products, "enterprising" but mostly selling them, and then selling them off as they went out of fashion.