
Toshiba picks Bain Capital as preferred memory unit buyer - ytch
https://asia.nikkei.com/Business/Companies/Toshiba-picks-Bain-Capital-as-preferred-memory-unit-buyer
======
gumby
I don't understand how the LBO companies like Bain still get away with it. I
would have thought that the lenders would have gotten wise to it and stopped
lending. After all they lose their principal in the almost inevitable
bankruptcy.

~~~
xenadu02
Normally I would agree but in this case Dell and Apple appear to be the
ultimate backers. I assume Bain was brought in to lead the financing aspects.

(Disclosure: I have zero inside knowledge of this deal)

~~~
wtallis
Bain has been in the bidding process pretty much from the very start, while
Apple and Dell only started getting mentioned as part of the consortium
recently.

------
gourou
This seemed in the pocket for Western Digital and Foxconn, I sure didn't
expect them to choose Apple and Dell.

------
crunkykd
Strip & Flip Bain loads their acquisitions up with debt to pay themselves off,
and then runs for the hills. Like with Toys-R-Us now going bankrupt. Recall
Mitt Romney was CEO of Bain. This is the GOP business modus operandi.

------
downrightmike
Great news for all the other chip makers.

------
ringaroundthetx
"Think of it like The Toys-R-Us of DRAM"

I would have loved to be in that board meeting

~~~
ehnto
Considering Toys-R-Us has gone bankrupt, perhaps not the most prosperous
analogy either!

~~~
eli
Pretty sure Bain Capital owns a controlling stake in Toys-R-Us

~~~
justin66
Loading down one of their companies with debt and then having it file for
bankruptcy is a strategy they've used in the past. I wonder if that's what
happened here.

~~~
JumpCrisscross
> _Loading down one of their companies with debt and then having it file for
> bankruptcy is a strategy they 've used in the past_

Bain will lose almost all its money in Toys ‘R’ Us. It has written its equity
down to zero, didn’t really take any dividends along the way, and itself holds
the most junior tranches of debt.

~~~
remline
Then other holdings of Bain sold "Toys R Us" goods and services and were
perhaps sold after a good quarter?

------
nerpderp83
I don't yet understand.

------
tryingagainbro
Their MO: Buy it with debt. Charge the company for the debt and huge
management fees which will be paid with more debt. Take it public after
milking it to the max, so you can make even more money in the IPO.

Chapter 11 is next [http://www.businessinsider.com/brick-and-mortar-retail-
priva...](http://www.businessinsider.com/brick-and-mortar-retail-private-
equity-debt-financing-lbo-2017-8)

~~~
whatok
Out of all the businesses Bain Capital's private equity arm has listed in the
link below, how many of them follow the template you've described?

[http://www.baincapitalprivateequity.com/investments](http://www.baincapitalprivateequity.com/investments)

~~~
chrisgd
To be fair, I think there would be some survivor bias. They aren't going to
list all their failures

~~~
whatok
The original poster seems to be able to forecast how these companies are going
to do. It's arguably harder to do that when a deal is just announced so I'd
imagine it's easier with this list of businesses that they've already closed
on.

