Comment by b3lvedere
4 hours ago
Oh no!
Who would have guessed that turning social human constructions into businesses that 'have to make profits' could result in such deaths!?
What on earth could be next?
Defining margins again and again until these businesses suddenly actually are totally compliant and suddenly there are even more deaths?
Oh how will we ever solve this strange behaviour!?
/s^s
One thing I don't see is the other side of this story: the sellers.
I don't get why sellers are selling to PE. Can these services not "IPO"? Why do these companies need to sell?
When PE takes over medical practices, my understanding is there just isn't enough capital available for a dentist to "cash out". The options are either they find another dentist to buy it, the close the practice, or they sell the private equity...
How is local doctor's office going to IPO? An IPO is just selling to the public instead of a private buyer. Not to mention the amount of paperwork and ongoing reporting requirements of actually IPOing.
Talking to a single buyer is easier than arranging an IPO and I would imagine the diligence far less onerous.
Out of the gate you need $27.5m in cash flow with $2.2m in profit. I doubt there are many single practice dentists doing that kind of volume.
You can’t just IPO because you want out of the business. There’s lots of reporting and regulatory requirements to ensure you aren’t screwing investors.
In the past farmers needed COOPs in order to make their products/the local community's economy viable. Today we need something like COIVs (community owned investment vehicles). Kiva for the rest of us I guess.
Successful business owner has revenue of $2-20MM with their owner's "salary" being $200k-4MM which is very respectable.
Owner gets old or want to quit the business and a PE offer of 2-8x Revenue comes in.
Owner making $200k instantly cashes that $4MM check and walks away.
PE takes contracts, guts all the expenses and cuts staff in half, and purchase price is recovered in <2 years.
Suddenly there is only one HVAC or dentist company that can maintain licenses and insurance.
Going the IPO route is not an option for most of the companies being acquired (vets, plumbers, electricians, construction companies, etc.)
why would you think a public traded company behaves any better than a privately owned one?
> I don't get why sellers are selling to PE. Can these services not "IPO"? Why do these companies need to sell?
Shifting private ownership to a publicly traded company is an awful lot of paperwork (especially for accounting) and upfront costs, you need to time it properly, you need to find banks willing to cooperate.
In contrast, selling a private company to a PE is a pretty much straightforward transaction.
I think it's totally appropriate to hold it against them if they knowingly sell out to scumbags. Society used to look down on selling out. We wrote songs about it. But in 2026 it is glorified.
You're 55, making $400k a year as a HVAC Repair Company, and while you love the business and your kids are in expensive colleges (not taking over the business) you are offered $8MM to sell. Instant retirement. A buy out isn't the same as selling out because people live off of cash and not principal.
> Who would have guessed that turning social human constructions into businesses that 'have to make profits' could result in such deaths!?
What are these "social human constructions"?
Healthcare, protection like police and fire departmens, maintenance, repairs, etc.
You don't understand! It's because it's not a truly free market. If it was truly free of regulation and government oversight it would be incredible.
I get this is sarcasm but... meanwhile the founders/great thinkers on free markets wrote extensively on how free markets REQUIRED strong government and strong government oversight.
Indeed it does. Extremely strong government oversight plus corruption control. It’s getting out of control very fast.
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