An insider at Ultimate Software offers a compelling take behind its $11 billion private equity takeover, and the trillions of dollars flowing into the industry
. My read on the speech is that Rogers is simply arguing there are times when it makes sense for a firm to be public or private, and that different capital structures work at different stages in a company’s life cycle. Because it comes from a seller with a record of success, it holds more weight than a PE pitch deck that might make the same point. Also, private markets are now so flush with cash, take-private deals don’t necessarily fit the old mold of LBOs.
Then you look at your new checking account for your business and you say this is awesome, I'm never going to need money again. I have everything I need to start this great idea and live happily ever after. What happens next? You run out of money and you have to raise more money. No one ever thinks they are going to need more money. Almost every founder realizes they have to get more money. But that is OK.
So what is happening, you see the growth starting to decline and if you can pull off fifteen or eighteen percent growth at that size, it is incredibly impressive, and completely uninteresting to Wall Street. Guess what? Now the reality of Wall Street sets in. If you're not growing at a certain rate, then Wall Street says, well, then you better be making a whole lot of money. So now you're a company and you’re growing at a rate of about 15 percent, 18 percent.
Maybe they didn't realize that there's a new breed of private equity out there today, called growth equity. And this is what growth equity firms believe. Growth Equity firms invest in well-run, growing businesses with proven business models and solid management teams looking to continue driving the business. They look for businesses just like ours to do this very thing. So it's exciting. It really is. This is the type of partner that we're looking for.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why private equity appealsPrivate equity's edge over large listed stocks seems to have dulled. Yet it still appeals
Read more »
Private equity investors fret about managers overpaying for dealsSome of the world's biggest private equity investors raised concerns this w...
Read more »
Newmont Mining rejects Barrick Gold's $17.8 billion hostile-takeover bidNewmont Mining rejected Barrick Gold's hostile takeover bid on Monday. The merger of the two would have created the world's largest gold miner.
Read more »
Financier Who Amassed Insurance Firms Diverted $2 Billion Into His Private EmpireThe sheer scale of Greg Lindberg’s use of insurance assets to invest in his own businesses has little precedent in recent decades, industry experts say, and exposes hundreds of thousands of policyholders to a potentially risky strategy. He is under investigation by the FBI and state authorities.
Read more »
Lowe's sales miss views, takes $1.6 billion charge
Read more »
Wall Street thinks the $1 billion market CBD could explode to $16 billion by 2025In a new report, analysts at the investment bank Cowen highlight a marijuana and hemp compound called CBD as a massive opportunity for growth.
Read more »
China's stocks just hit the big time — $80 billion in Chinese equities could now flow into one of the world's major indexesGlobal index provider MSCI is quadrupling the weighting of Chinese mainland shares in its global benchmarks later this year.
Read more »
Newmont Rejects Barrick Gold’s Takeover BidNewmont Mining turned down a proposal from rival Barrick Gold to merge and create one of the world’s largest mining companies, a widely expected move.
Read more »