◼ FINANCE Bloomberg Businessweek October 7, 2019
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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