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benjam
coventry_eagle
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.