Warren Distribution sold to Equity Firm
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This is the same Warren that supplies Walmart, Amazon and Costco, among others, correct? If there is a good management team in place, the PE firm likely will leave them be as long as they are making money at it. There will, of course, be constant pressure to understand and reduce costs of production and improve margins.
has a leverage buyout ever resulted in quality remaining the same? Usually the company is bankrupt in a couple of years. Sad
While equity companies have been known to strip value, if you look at the customer base of Warren, they will not put up less quality or service. If you read about Pritzker, they tend to hold family owned businesses.Its not uncommon when equity firms buy a company they drain it of any value, cheapen the product and dump it. It may be prudent to stay clear of their products until it is sure the quality is not taking a hit.
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In my more intimate experiences, no, but that is limited.
That assumes the buyers are more interested in maintaining the current customer base than trying to expand beyond the market they already are successful in and appealing to the largest market (people who only care about price).
So these are the people that now own Warren now?
gustancho.com
This looks like good old vulture capitalism. Just one of the reasons why middle America has been hurting for many years. Vulture capitalists exploiting the system. I guess Warren will be squeezed for whatever its got to make its new owners more money.
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gustancho.com
This looks like good old vulture capitalism. Just one of the reasons why middle America has been hurting for many years. Vulture capitalists exploiting the system. I guess Warren will be squeezed for whatever its got to make its new owners more money.
PE buyouts usually end up poorly. They come in and try everything to cut cost and save money. Older employees let go, formulations changed by accountants to save cost. Close plants in US and send production to Far East or Mexico. Quality suffers, who cares! We are making the company more profitable. Then we can sell it for a profit in 3-5 years. Went through this we a company I worked for for 24 years. It was sad how low our quality got. Company s gone now, last company that bought it got rid of all but 4 employees.
It was a leveraged buyout according to Forced.
I was in the Semi robotics for a few years and every single one is gone now, or owned by the bigger Japanese parents. Most of the people I used to work with are now in the medical equipment industry.
LBO are usually the worst. They make money buying, load up with debt, then sell it to the next sucker to hold the bag, then the sucker end up with a struggling business and try to squeeze it even further and the whole house of card falls apart.
ToysRus? Mervyns?
This is worrisome. As others mentioned, these corporate buyouts tend to end badly as the corporation strips the soul and quality control from the company, gets rid of valued employees, cuts all corners, and ultimately kills the brand. This just happened to Remington firearms over the last decade. They turned an American Icon into a "do not buy" product...
Don't worry fellas. I'll still be on board. What could go wrong? Huh huh huh huh?
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