Skip to comments.Private Equity’s Free Pass
Posted on 07/29/2014 5:51:41 PM PDT by Lorianne
For thousands of hobbyists, the local Michaels Stores outlet is a must-stop shop for scrapbooks, dried flowers, crochet hooks, sewing notions and dozens of other do-it-yourself paraphernalia.
In these essentials, Michaels, the nations largest arts-and-crafts retailer, has remained unchanged for years. But behind the scenes, the company has been refashioned by two financial giants Bain Capital and the Blackstone Group which have effectively controlled Michaels since 2006, when they took the chain private in a $6 billion leveraged buyout. Since then, Bain and Blackstone have profited from scrapbookers and needlepoint artists in part through an array of sophisticated financial techniques, most recently by selling shares in Michaels in an initial public offering in June.
In some ways, the practices used at Michaels by Bain and Blackstone and by other private equity firms at other companies closely resemble those employed by investment banks like Goldman Sachs and Morgan Stanley. For example, all of these financial firms advise corporations on mergers and acquisitions, on issuing debt and on how to rejigger their financial structures. And they are exceedingly well paid for these services.
(Excerpt) Read more at nytimes.com ...
Yeah, kind of makes you ask that old question - cui bono? - with respect to the Hobby Lobby health-plan matter.
Sounds like a success story.
What is the NYT’s beef?
For example, all of these financial firms advise corporations on mergers and acquisitions, on issuing debt and on how to rejigger their financial structures. And they are exceedingly well paid for these services.
If the government didn’t mire these companies in red tape they wouldn’t need all those services.
What is the NYTs beef?
Deep down, their own miserable corporate performance.
I think the liberals would love the crony capitalists at private equity. Many of them are top Democrat contributors.
The logic in this article is mind boggling...the broker-dealer registration of the firms mentioned is because they are doing those investment banking functions in the Public Securities Markets! Publicly traded securities are regulated by the SEC. When Joe Blow sells his manufacturing business to an private buyer it is not a regulated activity - nor is it if he hires consultants to come in and help improve the business. Because of the size it needs to be regulated? Bain can market the IPO to the public, they hire a broker dealer. But not necessary to solicit investors when the company is private -although they probably would to increase distirbution.