[mgarblik]

Sunnen, the world leader in honing technology was just sold to a private equity firm P4G Capitol Partners. WOW! After over 100 years in St. Louis and dozens and dozens of patents, the company will be ruined in a matter of months IMO. I expect like all the other private equity firms, anyone making a living wage will be terminated, production moved from St. Louis to China, and the only thing remaining will be the name and skyrocketing prices. Joe Sunnen must be rolling in his grave. Here is P4G's current portfolio. I especially like Unique Elevator Interiors!!. What a joke. http://www.p4gcap.com/portfolio.html

[Stuart]

Was this a recent purchase? Looking at both P4G's and Sunnen's websites it appears like they've been together for some time. I can't find any news releases about it online.

[dataway]

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.

[mgarblik]

Originally Posted by Stuart

Was this a recent purchase? Looking at both P4G's and Sunnen's websites it appears like they've been together for some time. I can't find any news releases about it online.

This must be fresh news. I found it in the AERA (Automotive Engine Rebuilders Association) E-newsletter that just came in. Just a couple sentences on page six. Seems they are trying to keep this very quiet for some reason.

Dataway: You have a very optimistic outlook for Sunnen and Equity group acquisitions. I truly hope you are right. From what I have seen in the performance industry at least, it has been one disaster after another in these situations. Just look at all the companies Holley has ruined with their 50+ acquisitions. Also Equal Opportunity Partners, with the dozens of performance brands they have acquired like Edelbrock. They have ruined or are in the process of ruining most of them. I wish the best for all of them though.

BTW, Dataway, I have no doubt Sunnen was in financial trouble. Maybe this was their only option to stay in business. About 20 years ago, Sunnen went out and bought out half a dozen of their competitors. AmPro, Storm Vulcan, Tobin Arp, and others. They ended up spinning them all back off over the last 10 years keeping only the core honing business. So they over-expanded and it came back to bite them.

[Elarson]

The company that I work for is owned by a private equity firm. Thriving company, then the founder died, his daughter ran it for a few years (and didn't want the hassle) so she sold it. Things are different from when I could walk into the owner's office and chat with him, but fortunately not totally screwed up.

Lots of viable companies get sold when the founder wants to retire and cash out.

One investor example that we were pretty close to: NOS had a 90+% market share. Then Holley bought them, dumped the employees who knew the business, moved manufacturing, downsized the PRI booth and opened the door for all of the other nitrous companies. I'm suspicious that NOS makes most of their money off energy drinks (which are packaged on the same line as Monster) now.

Eric