PE HUB Wire Highlights, 8.28.19


Photo of Luisa Beltran, PE HUB Senior Editor, courtesy of Buyouts Insider.

Blackstone offers to buy rest of Tallgrass Energy; HGGC sells part of Integrity Marketing stake; Defending PE’s handling of retail

Today we have an unlikely scenario. Someone is defending private equity and its handling of retailers like Toys ‘R’ Us and others.

Richard Kestenbaum, co-founder and partner of Triangle Capital, has assumed this herculean task in a column for Forbes where he tells everyone to stop blaming PE for the demise of retail.

Kestenbaum goes through an analysis of how private equity buys companies, their use of debt and how many legacy retailers haven’t adapted well to changes in culture and technology. Basically, PE bought these risky companies at attractive values because no one else wanted them, Kestenbaum said.

The struggles in retail aren’t done yet and many others will likely go bankrupt, he said. Kestenbaum points to Neiman MarcusNordstromBarneys and JC Penney, which are trying to find ways to survive.

“If Toys R Us, Payless Shoe and RadioShack were such great businesses, destroyed only by the greed and avarice of private equity, why did they disappear instead of being scooped up by other investors who could have made them into unleveraged, great businesses?” Kestenbaum said in the column.

Hubsters, any thoughts? Did Kestenbaum go far enough? Email me at lbeltran@buyoutsinsider.com

Apollo Global was once viewed as the most aggressive PE firm in terms of using debt. Robert Smith‘s buyout shop has dethroned Apollo as the most aggressive PE firm when it comes to loan covenants, Xtract Research LLC said. See my story here.

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