Bloomberg Businessweek - USA (2019-10-07)

(Antfer) #1
◼ FINANCE Bloomberg Businessweek October 7, 2019

28


PEfirmSunCapitalPartnersInc.ina 2005LBO.
“Whentheytookover,ourpayrollgotdrastically
cut,ourretirementplangotcut,andwesawa lotof
turnoveramongexecutives,”shesays.
OneofSunCapital’sfirstmovesasownerwasto
monetizeShopko’smostvaluableasset,itsrealestate,
bysellingit forabout$800millionandleasingback
thespacetoitsstores.Thatgenerateda short-term
windfallbutaddedtoShopko’slong-termrentcosts.
“Alotofstoresthatwereonceprofitablestartedto
showlowerprofitsbecausetheyhadtostartpaying
rent,”VanBeckumsays.
In2019,Shopkosaidit couldnolongerserviceits
debtandfiledforbankruptcy,ultimatelyshuttering
allofitsmorethan 360 stores.VanBeckumwasasked
tostayonasa managerduringherstore’sliquidation
andwaspromisedseveranceanda closingbonusin
return,shesays.Weekslater,shereceivedanemail
tellingherthatherseveranceclaimwouldn’tbepaid.
SunCapitalhassaidmoneyhasbeencontributedto

thebankruptcyplanthatcanpaysuchclaims.
Privateequityandhedgefundsgainedcontrolof
morethan 80 retailersinthepastdecade,accord-
ingtoa Julyreportbya groupofprogressiveorga-
nizationsincludingAmericansforFinancialReform
andUnitedforRespect.AndPE-ownedmerchants
accountformostofthebiggestrecentretailbank-
ruptcies,includingthoseofGymboree,Payless,and
Shopkointhepastyearalone.Thosebankruptcies
wipedout1.3millionjobs—includingpositionsat retail-
ersandrelatedjobs,suchasatvendors—according
tothereport,whichestimatesthat“WallStreetfirms
havedestroyedeighttimesasmanyretailjobsasthey
havecreatedinthepastdecade.”
WhetherLBOsperformpoorlybecauseofdebt,
businessstrategy,orcompetitionfromAmazon
.comInc.,researchshowstheyfareworsethantheir
publiccounterparts.A JulypaperbyBrianAyash
andMahdiRastadofCaliforniaPolytechnicState
Universityexaminedalmost 500 companies taken

1999 2004 2008

A Crushing Tide of Megadeals
Around2007,privateequitybuyoutsof
morethan$2billiongotsonumerous
thatwecanhardlyfitthemonthepage.
Thefinancial crisis interrupted the flow,
but only temporarily. Here’s a look at two
decades of deals. ——Tom Maloney

Zeneca Specialties

United Biscuits

MascoTech

Veba Electronics

Hibu

Eircom

Cognis Deutschland

Unique Pub Finance

ZF TRW Automotive Holdings

Smurfit Kappa

Sydney Airport

SoftBank Telecom

Ondeo Nalco

Debenhams

S&N Retail

CGX Energy

Warner Music Group

Extended Stay America

UGS

Panamasat

GSW Immobilien

LNR Property

AutomobileAssociation

Metro-Goldwyn-Mayer

Boise Cascade

Truvo Luxembourg

Intelsat Investments

NHP

Saga

Masonite International

SelectMedical

Maxeda

ChilcottUK

FISDataSystems

InsightCommunications

AmadeusGlobalTravelDistribution

Toys“R”Us

Wyndham International

InterGenInvestors

NeimanMarcusGroup

Viterra

BluestemGroup

Avago Technologies

Hertz

La Quinta

Somerfield

TDC

Suntory Beverage& FoodEurope

Dunkin’Brands

WobaDresden

MeriStarHospitalit

DubaiAerospceEnter i

AWASAviatio CapitalDesignatedActivity

Albertsons
FairmontHotes & Resorts

SensataTechnologies

LHR Airports

Nielsen

EducationManagement
CarrAmericaRealty

AssociatedBritishPortsHoldings

KerznerInternational
TrizecProperties

West

KinderMoganKansas

ARAMARK

SSPGroup
GeneralHealthcareGroup

Gambro

Travelport

MichaelsStores

BerryGlobalGroup
UnivisionCommunications

OldAII

CaudwellGroup

Kabelcom

SolocalGroup

Casema
HCA

DuquesneLightHoldings

MomentivePerformanceMaterials
NXPUSA

CapioGroupServices
FourSeasonsHealthCare

Intrawest

IHeartCommunications

FourSeasonsHoldings

OSIRestaurantPartners

SolocalGroup

AWGParent
EergiaGroupNIHoldings

CaesarsEntertainment

Biomet
RealogyGroup

Adesa

Beechcraft

BAWAGPSKBankfuerArbeitundWirtschaftundOe

SabreHoldings

EquityOfficePropertiesTrust

TrustedMediaBrands

e AshikagaBank

GavilonGroup

Biffa

CHCHelicopter

AngelTrains

ExproInternationalGroup

ConvaTec

WeatherGroupTelevisio

XellaInternational

SeaWorld Parks & Entertainment

IQVIA

CBRService

PinnacleFoodsGroup
EdgarsConsolidatedStores

LaureateEducation

CatalentPharmaSolutions
MolnlyckeHealthCare

AllianceAtlantisCommunications

ServiceMaster

SpiritFinance

istaInternational
Claire’sStores

Dresser

DollarGeneral

AllianceBootsHoldings

Avaya
HugoBoss

Ceridian

ValentinoFashionGroup

EMIGroup
CDW

Bausch& Lomb
Alltel

USFoods
VWRInternational
ActavisGroup
PegasusAviationFinance

FirstData
Tribune

Tervita

AllisonTransmissionHoldings
BrakeBros

TheAutomobileAssociationandSaga
GuitarCenter

Scandlines
NuveenInvestments

SpireHealthcare
HDSupply

ApplusServiciosTecnologicos
Elis

Univar
Sequa

LegacyHotelsRealEstateInvestment Trust
Williams Scotsman International

ManorCare
ParkHotels& Resorts

PugetEnergy

Kelda Group
Abbot Group
Ascential Group

GoodmanGlobal
ArystaLifeScience

Energy Future Holdings

The$48billion buyout of TXU
remains the biggest ever;
renamed Energy Future Holdings,
the utility went bankrupt in 2014

The fall of Bear
Stearns marks
the start of the
financial crisis

Dunkin’ went public
in 2012, earning a
fat profit for its PE
owners
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