But of course that "pure market" viewpoint doesn't take into account the social costs and individual pains these operations entail.
Let’s take Debenhams in the UK as an example
- Used to own all it’s stores - Got bought by PE (who attached the debt they used to buy Debenhams to Debenhams so the PE group now owe zero) - Split the stores from the retail operation but made the retail operation lease them on ever increasing rents - Sold the stores to British Land - Eventually Debenhams retail can’t afford the rents (as they only ever increase), and the debt payments so goes bust
Similar patterns with PE acquired companies not being able to afford their debt payments is common, coupled with PE companies extracting any free cash as a dividend shortly after purchase
What PE companies are doing isn’t culling the weak but extracting the most they can from businesses and then leaving suppliers, employees, pension scheme members to pick up the cost