Related: Wall Street Back the Way It Was
Yup, BACK to the SAME OLD TRICKS, folks!!
"As owners profited, fabled firm declined" by Julie Creswell, New York Times | October 5, 2009
NEW YORK - Thomas H. Lee Partners, of Boston, has escaped unscathed. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping to run it. Last year, the firm even gave itself a small raise.
Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years. How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times.
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Related: The Galling Greed of Goldman Sachs
The words parasitic vampires come to mind, don't they?
Every step along the way, the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably. But the load weighed down an otherwise healthy company....
That is why DEBT is NEVER a GOOD THING -- especially to the USURIOUS BLOOD-SUCKERS of WALL STREET!!!!
In many ways, what private equity firms did at Simmons mimicked the subprime mortgage boom. Fueled by easy money, buyout kings like THL upended the old order on Wall Street. These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, recouping all of the cash it put down, and then some.
Sure SMELLS like THIEVERY to ME!!!
The result: THL was guaranteed a profit, regardless of how Simmons performed....
And for the defense:
Executives at THL counter that Simmons was the victim of hard economic times, not mismanagement or too much debt. They point to Simmons’ 40 percent growth in sales and 26 percent climb in operating income from 2003 through 2007, as well as 13 consecutive quarters of market share gains against competitors through March 2009.
As you guys sunk them in debt and gave yourself bonuses, huh?
Simmons’ woes, said Scott A. Schoen, a co-president of the firm who sat on Simmons board, are entirely caused by the “unprecedented and unforeseeable’’ downturn that has shaken the entire bedding industry.
Yeah, except one guy did see it.
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