The title says it all at this point.
[OP]
Contributor
The title says it all at this point.
Contributor
https://www.starrett.com/news-events...rivate-company
MiddleGround Capital is a private equity firm. It'll be dismantled.
~mike
happy in my mud hut
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Not sure why you think it will be dismantled. From my reading it looks like MiddleGround wants to move forward with another respected name on their roster.Originally Posted by mike stenson
> https://www.morningstar.com/news/bus...rivate-company
From the link above:
Especially the comment on "reshoring" doesn't sound like dismantling the parts for quick cash. Reshoring is the process of moving overseas manufacturing back to home country soil.“MiddleGround is thrilled to be partnering with Starrett, a brand we have long admired, and a company that we have followed in the public markets for several years. Most of MiddleGround's Operations team gained familiarity with Starrett products over the course of their manufacturing careers, and we are excited about the opportunity to further position the company for its future on the front lines of innovation, advanced manufacturing and reshoring,” said John Stewart, Managing Partner of MiddleGround.
That is starting to be a common practice with "supply line" problems brought about in the past few years.
jtk
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
Contributor
Because private equity firms are generally interested in turning a quick buck and nothing more. This is true of every area that private equity firms have gotten themselves into since the 80s.
We'll see, but I will be surprised if they don't ruin the company.
~mike
happy in my mud hut
Contributor
I agree with Mike....and the "Starrett quality" will take the first hit.
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
Starrett quality took that hit years ago when they offshored many of their offerings.
Contributor
Yep, I found that out.
I've always bought the Starrett products still made here.
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
Private equity firms generally load up the acquired company with a lot of debt which has to be serviced. That leaves little money for research, marketing and other needs of the company. The best you can hope for is that the private equity company eventually sells the acquired company to an entity that wants to build on the products and reputation.
I'd tell the employees to "look out". Private equity companies usually have to reduce expenses (read people) to service that debt.
Mike
Go into the world and do well. But more importantly, go into the world and do good.
I quit and became a full time woodworker a year after being bought by a company that got their funding from a private equity company.
Like said above, the company never had investment money on hand because it was getting eaten up by the investors returns. Once that investment firm had enough they left and our company got funding by another firm etc etc.
It COULD be that this investment firm is different. But in the latest business environment of stock buy backs and ceo or shareholder value ratio to employees going absolutely crazy... I doubt it. But hey anything can happen.
Yes, I have 3 phase!
Member
To woodworkers, it is merely sad, but to machinists, it is heart breaking. The metalworker side of me liked Mitutoyo over Starrett. To a Canuck, they are both imported tools.
Contributor
I prefer Mitutoyo also.
My gage blocks, dial indcators, digital calipers, all Mitutoyo.
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
When private equity companies are mentioned, it always makes me think of that scene in Good Fellas where the main characters are burning down the restaurant for insurance money after maxing out the debt on its business credit.
Member
Wasnt that Sopranos?
Contributor
As someone who has worked in private equity for the last 24 years, I understand the negative comments as most folks are only familiar with the failures and misdeeds by some unscrupulous firms because that’s all that makes the evening news and headlines. I work for a firm that invests pension money in private equity funds and the returns (which have outpaced the public markets) we have generated are going to pay the retirements and health care of hard-working everyday people. I can tell you from first hand experience that the majority of the private equity managers are interested in growing businesses and helping them succeed, and sometimes that does involve cutting costs to become more efficient. Unlike most of Wall Street, PE managers invest a significant portion of their own wealth alongside investors so that interests are appropriately aligned. As a specific example, you might be familiar with the company 80/20 which makes aluminum extrusions. They were purchased by a private equity firm a couple years ago as the founder was looking for growth capital and to professionalize the management of the company as part of a sucession plan. The company has flourished under the new ownership. I don’t know Doug Starrett but I know that he is 69 years old and probably looking to retire. There may not be another family member or obvious heir apparent to take over the company and he may be looking to partner with a private equity firm to develop such a plan. I would encourage folks to educate themselves a bit before making blanket disparaging comments about an entire industry.
There is a very fine line between “hobby” and “mental illness.” - Dave Barry
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Couldn't miss the name, is this your side gig?
https://www.baincapital.com/
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