◼ FINANCE Bloomberg Businessweek October 7, 201928
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.
SunCapitalhassaidmoneyhasbeencontributedtothebankruptcyplanthatcanpaysuchclaims.
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 taken1999 2004 2008A 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 MaloneyZeneca SpecialtiesUnited BiscuitsMascoTechVeba ElectronicsHibuEircomCognis DeutschlandUnique Pub FinanceZF TRW Automotive HoldingsSmurfit KappaSydney AirportSoftBank TelecomOndeo NalcoDebenhamsS&N RetailCGX EnergyWarner Music GroupExtended Stay AmericaUGSPanamasatGSW ImmobilienLNR PropertyAutomobileAssociationMetro-Goldwyn-MayerBoise CascadeTruvo LuxembourgIntelsat InvestmentsNHPSagaMasonite InternationalSelectMedicalMaxedaChilcottUKFISDataSystemsInsightCommunicationsAmadeusGlobalTravelDistributionToys“R”UsWyndham InternationalInterGenInvestorsNeimanMarcusGroupViterraBluestemGroupAvago TechnologiesHertzLa QuintaSomerfieldTDCSuntory Beverage& FoodEuropeDunkin’BrandsWobaDresdenMeriStarHospitalitDubaiAerospceEnter iAWASAviatio CapitalDesignatedActivityAlbertsons
FairmontHotes & ResortsSensataTechnologiesLHR AirportsNielsenEducationManagement
CarrAmericaRealtyAssociatedBritishPortsHoldingsKerznerInternational
TrizecPropertiesWestKinderMoganKansasARAMARKSSPGroup
GeneralHealthcareGroupGambroTravelportMichaelsStoresBerryGlobalGroup
UnivisionCommunicationsOldAIICaudwellGroupKabelcomSolocalGroupCasema
HCADuquesneLightHoldingsMomentivePerformanceMaterials
NXPUSACapioGroupServices
FourSeasonsHealthCareIntrawestIHeartCommunicationsFourSeasonsHoldingsOSIRestaurantPartnersSolocalGroupAWGParent
EergiaGroupNIHoldingsCaesarsEntertainmentBiomet
RealogyGroupAdesaBeechcraftBAWAGPSKBankfuerArbeitundWirtschaftundOeSabreHoldingsEquityOfficePropertiesTrustTrustedMediaBrandse AshikagaBankGavilonGroupBiffaCHCHelicopterAngelTrainsExproInternationalGroupConvaTecWeatherGroupTelevisioXellaInternationalSeaWorld Parks & EntertainmentIQVIACBRServicePinnacleFoodsGroup
EdgarsConsolidatedStoresLaureateEducationCatalentPharmaSolutions
MolnlyckeHealthCareAllianceAtlantisCommunicationsServiceMasterSpiritFinanceistaInternational
Claire’sStoresDresserDollarGeneralAllianceBootsHoldingsAvaya
HugoBossCeridianValentinoFashionGroupEMIGroup
CDWBausch& Lomb
AlltelUSFoods
VWRInternational
ActavisGroup
PegasusAviationFinanceFirstData
TribuneTervitaAllisonTransmissionHoldings
BrakeBrosTheAutomobileAssociationandSaga
GuitarCenterScandlines
NuveenInvestmentsSpireHealthcare
HDSupplyApplusServiciosTecnologicos
ElisUnivar
SequaLegacyHotelsRealEstateInvestment Trust
Williams Scotsman InternationalManorCare
ParkHotels& ResortsPugetEnergyKelda Group
Abbot Group
Ascential GroupGoodmanGlobal
ArystaLifeScienceEnergy Future HoldingsThe$48billion buyout of TXU
remains the biggest ever;
renamed Energy Future Holdings,
the utility went bankrupt in 2014The fall of Bear
Stearns marks
the start of the
financial crisisDunkin’ went public
in 2012, earning a
fat profit for its PE
owners