Re: Guitar Center sold..dumped due to intense debt..why..?

Frank D. Greco wrote:
JJTj <me@xxxxxxxxxxxxx> sez:


CNN stated today that the Guitar Center chain has been
sold for $1.sumthing BILLION. This sale include all debts.

WHY was G/C in such debt..?


Not really. They were sold for $1.9B plus assumption
of $200M in debt, for a total of $2.1B. The owners
(mostly institutional) of GC will make big $$. Goldman
Sachs was the financial advisor on this deal (who owned
833k shares of GC btw)... they did pretty well.

They did not have "intense debt"... just normal debt.

Bain probably thought they could help run GC better,
which is the usual private equity mentality. Private equity
shops want to take a company, build it up in the short term
and then sell it, making even more money.


Maybe the market couldn't sell the truck/boat loads of
imported crap no one will buy no matter how cheap it's dumped.


Their stock was actually doing quite well.
It was basically a private equity firm offering a
premium for an existing business that appeared to be
undervalued.

It will be interesting to see how Bain allows the existing
management of GC to operate. Do they rein in costs and
sell even worse crap, or do they head up the ladder to
sell higher-margin, more after-sale-service (recurring
revenue) products?

At this point, who knows...

F

Agreed. I wonder where they got their 'market' analysis work done...

I've seen Private Equity come in thinking there are costs they can reduce in operations that will better the bottom line... only to find out otherwise.

As hard as they've tried, GC couldn't knock off the Sam Ash down the street...

I'm more interested in what will happen to Gibson... The new Gibsons I've seen over the last 18 months are crappy..! ! ! The finish looks like SHIT... they've been having 1/2 price sales, or 2-for-1 sales... Why..???? In an effert to 'move' inventory...??? Keep volume/market share..???

Maybe buying GC is the prelude to buying Gibson... eh..???

That makes the most sense...

.

Relevant Pages

  • Re: Guitar Center sold..dumped due to intense debt..why..?
    ... They were sold for $1.9B plus assumption ... of $200M in debt, ... which is the usual private equity mentality. ... and then sell it, making even more money. ...
    (alt.guitar.amps)
  • Re: Boat Show
    ... Bavaria couldn't come close to servicing the debt incurred in buying ... A google of "bavaria yachts debt" unravels more of the sorry tale. ... So even when mass producing boats on the scale Bavaria do there is no money to ... Bavaria were reasonably profitable until the leveraged buyout which (like many Private Equity Deals) saddled it with too much debt. ...
    (uk.rec.sailing)
  • Re: Contract fell thru - need advice
    ... prohibits your home from being sold for debt you owe. ... You do know that the Nevada law is not ... auction and recover the debt from the proceeds. ...
    (alt.home.repair)
  • Re: Congress 98% in line with Presidents own budget
    ... paying long after these guys and gals in Congress are dead and gone from ... They do not care that they are affecting American foreign ... the US sold in order to finance that debt. ...
    (soc.retirement)
  • Re: Guitar Center sold..dumped due to intense debt..why..?
    ... WHY was G/C in such debt..? ... And as RE prices fall, it is putting the 'squeeze' on folks... ... that's called corporate finance strategy. ... sold by kids who know little real info about it... ...
    (alt.guitar.amps)