It's not always the case. A company would have to be in very poor financial condition (typically) to be acquired by a private equity firm, so they were basically going to go out of business without an infusion of cash or major restructuring.
There are many companies that have been brought back from disaster by private equity firms. A lot depends on just how bad a shape they are in, and if potential profit from restructuring is greater than from selling off assets.
Often "Old" companies have failed to modernize, failed to leverage new technology etc. and all they need is new leadership to get them on a firm footing again.
Prime example would have been Ducacti motorcycles, in the 70's and 80's they were a joke, going broke, horrible quality control, horrible product support ... but they had a huge brand identity. They were bought by a private equity firm, turned around and then sold to Audi (Volkswagen Group) ... now Ducati is one of the most respected high performance motorcycle companies in the world with world class R&D and they just won the 2023 world road racing championship. They now make a better product than at any time in their history.
It takes more than making a great product these days, you have to run the company right. Sunnen probably wasn't doing a good job with the business end of things.
__________________
I'm World's Best Hyperbolist !!
|