You are reading a single comment by @BrickMan and its replies.
Click here to read the full conversation.
-
Private equity usually acquire such companies via a leveraged buy out and depending on the equity of the sponsor the debt is usually high yield or PIK Notes with interest between 6 to 15% per annum.
They'll try to extract value via cost cutting, sales push, or reposition the product via high marketing.
Not all succeed, as the high debt service means they might not meet their covenants or payment schedule if there's a bad quarter or two.
This is where the equity injection comes in but I guess the sponsor is reluctant to pump any more cash hence the lender's reluctance to extend their credit.
Either they stump up the cash, get a buyer or if both fails and in the extreme scenario, the lenders can enforce and seize the business.
coventry_eagle
@BrickMan
They have a lot of expensive retail units around country, doesn't take many slightly quiet months for that to gang up on you. I know some folks in local Evans stores and said it's just been slightly quiet but not unusually so.
Don't think they are in dire straights, just maybe worse quarter than they were expecting. A few stores might get shed.
Mostly from a bike person point of view, some staff are excellent, but most are really quite useless, and from folk I known work for Evans they do not treat them well at all.