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0 pointsairstrike4y ago0 comments

Define "gut up". Why would Apollo want to destroy the asset they just bought?

0 comments

az_reth4y ago

The same reason a scrapyard buys broken cars?

airstrikeOP4y ago

Or maybe Apollo bought this in the same way some people buy fixer-uppers and flip them?

Analogies are great for illustration, but not for arguments. They don't really prove anything.

sparcpile4y ago

Venture Capital firms love to use throw debt at an asset so that they can have a cash windfall. The result is that the assets can never pay off the debt and end up declaring bankruptcy. See K-Mart, Sears, Toys R' Us, and anything that a vulture capitalist touches.

stu2b504y ago

Venture Capital firms are early stage private investors. They don't do LBOs with dying companies, since that would naturally be a late stage investment. You're probably thinking of private equity.

airstrikeOP4y ago

Your view of how LBOs work is really misinformed. You picked 3 famous PE deals that failed, but those are exceptions.

Apollo alone has done 150 private equity transactions, the vast majority of which have been tremendously successful otherwise investors would not be giving them more money to continue to invest.

_jal4y ago

A lot of PE follows a well-understood playbook. Buy a player in a settled industry, cut costs (== reduce maintenance, make the workforce cost less, etc.) and milk it for as long as possible.

That tends to work for investors; customers and employees, well.

The Artist Formerly Known as SolarWinds is PE owned.

1 more reply

CryptoBanker4y ago

Successful from the point of the PE firm is not the same as successful from the point of view of the acquired company

1 more reply

sayhar4y ago

Yes, but you're thinking of private equity.

j / k navigate · click thread line to collapse

0 comments

az_reth4y ago

The same reason a scrapyard buys broken cars?

airstrikeOP4y ago

Or maybe Apollo bought this in the same way some people buy fixer-uppers and flip them?

Analogies are great for illustration, but not for arguments. They don't really prove anything.

sparcpile4y ago

stu2b504y ago

Venture Capital firms are early stage private investors. They don't do LBOs with dying companies, since that would naturally be a late stage investment. You're probably thinking of private equity.

airstrikeOP4y ago

Your view of how LBOs work is really misinformed. You picked 3 famous PE deals that failed, but those are exceptions.

Apollo alone has done 150 private equity transactions, the vast majority of which have been tremendously successful otherwise investors would not be giving them more money to continue to invest.

_jal4y ago

A lot of PE follows a well-understood playbook. Buy a player in a settled industry, cut costs (== reduce maintenance, make the workforce cost less, etc.) and milk it for as long as possible.

That tends to work for investors; customers and employees, well.

The Artist Formerly Known as SolarWinds is PE owned.

1 more reply

CryptoBanker4y ago

Successful from the point of the PE firm is not the same as successful from the point of view of the acquired company

1 more reply

sayhar4y ago

Yes, but you're thinking of private equity.

j / k navigate · click thread line to collapse