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Coping with Private Equity

Private equity firms have been around for years, but many otherwise well-informed citizens know little about them. The presidential campaign of 2012 increased awareness, since Mitt Romney was asked about his career in the private equity industry. In the autumn of 2013, Jennifer Reingold of Fortune magazine produced a hair-raising article, "Squeezing Heinz", about events that followed the acquisition of the Pittsburgh-based food company by 3G Capital.

Like it or not, it is a fact that a growing number of corporate owners find that selling a company to a private equity may be the best available alternative for an entrepreneur who wants to liquidate. A typical strategy for the private equity firm is to identify ways to operate more economically and improve the bottom line, often as a prelude to selling the company to another party. There is nothing illegal about this, but it certainly can be stressful for those who work in the acquired company.

We are aware of two logistics service providers that were acquired by private equity firms, and no doubt there are more that have been or will be sold to similar operations. Therefore, it is important for everyone who works for a corporation to understand the risks when and if your company is sold.

 

K. B. Ackerman Company
2041 Riverside Drive
Suite 204
Columbus, Ohio 43221
Phone 614-488-3165
Fax 614-488-9243

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