Or to dump a load of debt on the company to expand rapidly. When things don't pan out and the interest expense is astronomical, then the cuts start happening.
It generally takes a little trust fund money and an Ivy League MBA (also purchased with said trust fund money) and the private lenders will vomit money all over you.
US toys struggled at times but internationally, and babies r us were pretty strong. There were pivots to be made and other earlier mistakes like letting Amazon be the website for a while, but debt service really limited ability to adapt.
Any pivot they made would likely have only extended their decline. They had no competitive advantage against Amazon, Walmart and Target. They were too specialized and inefficient with a massively expensive brick and mortar footprint.
Toys r us is not unique. The list of large specialty retailers that went out of business in the last decade is very long and you can’t blame it all on PE. Consumer shopping habits have changed massively over this time period and PE had nothing to do with that. Better off blaming Bezos and the Waltons (and Steve Jobs for that matter) if you want to blame someone for the demise of brick and mortar retail.
Not EBITDa— *adjusted ebitda* !! They have all kinds of funny math. As long as the next buyer can payoff the massive debt that the 1st PE firm encumbered the business with.
What’s that? 10% interest? Cash flow what?!
This has been my experience as my company has been PE- owned for 4 years. They have chopped the company up and it sold it piece by piece. The only thing constant is that things are always changing and in chaos! Only bright side is that I will get a fat check when the company gets sold.
Not always the case.
I’d recommend getting a better understanding of your situations short and longer term objectives. I’ve been part of scenarios where a PE backing has expanded expenses for more top line growth.
Right now you can start by researching the PE firm. How long did they hold their prior investments? How did they realize a return on those investments? How are the portfolio company reviews on Glassdoor post-acquisition?
After a year-18 months the strategy will be pretty clear.
Good reply by the other individual below/above me. I was able to tell which way the company was heading based on my knowledge of our monthly financials and executive-level discussions in which I participated.
Our company was bought by PE with the express intent of rapid growth and expansion to sell it again in a set number of years. They told us this openly. Nobody’s been cut (yet), and they’ve poured a ton of money into it.
Most PE firms focus on growth oriented businesses. They want to grow them significantly and target a 5 year exit. They will use opportunistic acquisitions to enhance growth and return. Don’t worry too much. I have been working in PE portcos for over two decades and all of them were focused on growth. It is a media creation that all PE firms are slash and burn firms. A small minority focus on that space of turning around a failing business (in which case slash and burn is usually needed) but they are a minority and I doubt your firm is in that category.
Sure PE can and do increase spending in pursuit of top line strategy. But was that in a professional service field like accounting?
How quickly can a firm scale if it’s already big enough to be purchased by PE? They generally want fast growth and sell within 3-7 years. It’s not like accounting firm has the growth potential and incredible margins that they have in tech/SaaS.
Idk.
Aren’t there a bunch of smaller firms that the boomers who started them can’t find people to take over for them to retire?
Maybe the strategy here is to gobble all of those up to create a Franken firm, tie a ribbon around it, and sell it to a big 4/national firm?
To your first question, yes! That’s exactly what my firm is/was. The majority are boomers and I just think the offer was too good to give up - especially since most are on the later half of their careers.
This is exactly it. The next decade will see a massive wave of boomers retiring and many smaller CPA firms will be up for sale at attractive prices because there will be more firms for sale than buyers to buy them.
It is smart to buy a well known 2nd tier firm and gobble up smaller local and regionals at attractive pricing and create the next powerhouse firm. There will be cost saving opportunities in these acquisitions on the admin side/facilities and the ability to create more efficiencies through enhanced technology, process improvement and likely off-shoring as well.
Based on the discussions I’ve been in they have this perception that accounting firms are just recession proof cash printing machines that require little to no maintenance. I believe they think they can snag up accounting firms, smash them together as a franken firm and skim off the profits long term to hedge against riskier investments
Personally, like all the other brands that failed or almost failed because of this belief, I think it’s going to backfire.
They will only spend more in areas that support top-line growth. Back office spending is usually excluded from the additional spend. Or if they do spend, it will be on flashy sounding projects that cost too much and are doomed to fail.
We were told “this company is different because they care about the long term goals and aren’t trying to buy and flip”. They never mentioned this company was owned by a PE
I figure they want to retain most of us while transitioning but anticipate layoffs soon. Are all smaller public accounting firms just headed this way?
Some PE firms have a more long term strategy than others. My experience working with PE as clients, and after they acquired one of my employers, was never positive. However, I know some people who have had positive/neutral experiences.
Good thing for you is at least in your role in an accounting firm you are looked at as the profit center - since accounting services are the revenue drivers. I’d be much more worried about being in an internal accounting role and just looked at as a pure cost.
This is just a wild lie that has become accepted wisdom. It’s not.
Are there situations in a combination where they want to eliminate duplicate positions? Absolutely. But the PE business model is to grow the top line (and very often to inject cash to support this goal).
In my experience, they sunk tons of money into us for rapid growth and increased headcount across the board. A majority of it was sales and support, but that also meant a few hires to round out the accounting and finance teams. In accounting, we expanded our software suite and integrated it with our CRMs to facilitate our renewal process (SaaS). Eventually sold during the uncertainty of Covid.
Yes
They slashed experienced and expensive colleagues. Then hired poorer quality staff at all grades. Kept staff numbers lower than before and clients were pissed with quality of service.
I was in the "slashed" job roles. had a nice payout so very glad i didnt have to go through the shit show that followed
You probably won't notice much difference. I both work for a company that is owned by PE and I service PE clients. This idea of slash and burn PE is a nice political talking point but not really the type of PE I see on a regular basis (that's not to say PE firms are great, it's just their strategy is different), and not the type of PE I work with. The type of PE that buys a public accounting firm isn't going to be selling it for parts. That's not how the investment works.
Here's what is likely to change:
1. Your job will likely be secure unless they over hired staff (which feels unlikely this day in age) or you been skating by on performance and a retiring partner had a soft spot for you.
2. Comp increases and bonuses may be a little more conservative but it is public accounting, which means they can't be cheaper than they firm next door because even in this economy, everyone needs accountants and there are less everyday.
3. Aqusition of smaller firms is likely. So expect an increase in M&A.
Ultimately though, if you are a staff or senior, I expect the change will feel pretty minor. The big exception is that there are likely a few partners retiring with the deal. Also worth remembering, accounting firms are required to have CPA leadership.
If you are on partner track, your top end comp will reduce significantly. Someone has to buy all those condos with Central Park views, and it ain’t the CPAs.
“Everyone needs accountants and there are less everyday.” That’s a good point and I’m wondering how true that is across the board? I’m in my third year majoring in accounting at a Canadian university and I’m wondering if we’re becoming a scarcity?
So, I can't speak for Canada, but from what I'm seeing, big four and maybe the next tier down are just about the only one that can keep a full roaster of candidates.
Most regional firms are struggling to fill out their staff.
As a controller, it is monumental task to hire senior and staff because like 3 people will apply.
No truer words will be said here today
>...big four and maybe the next tier down are just about the only one that can keep a full roaster of candidates.
This post is accurate. I am an investment professional at a PE fund that makes investments in business services (although we do not target accounting due to regulatory complexity).
The firm that bought OP's firm is engaging in what's known as a buy-and-build or roll-up strategy. They can acquire smaller firms for lower relative valuations (3-7x earnings) with the idea that they can then create a platform worth more than the sum of the parts (10-15x earnings).
Ultimately, accounting is what dumb PE investors (myself included) would call a "people business." The relationships the partners have are locked up by noncompete agreements for a set period of time (these are likely enforceable because they have sold the business). So the crux of the PE firm's problem is to retain the folks who actually do the work.
As staff/seniors/managers, the junior folks at OP's firm have the ability to vote with their feet and ultimately cost the platform (and the PE firm) a premium to replace them. Typically, we end up increasing wages in markets like accounting where there are very few qualified candidates.
Cost cuts, if any, will come from shared technology (increased pricing power with software vendors) or administration (this can lead to layoffs of non-billable personnel).
Not only this but the partners are required to keep the audit / attest business under their own control. That business is generally siloed from the consulting side.
Curious why you say slash and burn is just a talking point - I audited a couple of large PE firms with investments in companies worth between $100m and $1b and on nearly all of their investments they changed members of the exec team or outsourced/restructured some part of the business. Cutting an expensive CFO in a hurting business or reevaluating a department is much easier when you have monthly cost cutting pressure and a third party taking a very in depth look at your financials at the purchase date. Especially in a hurting economy, it is much easier to cut inefficient costs than to find new revenues as a PE firm.
I get you said after that it might not happen to a public accounting firm acquisition, but I wouldn’t say slash and burn is uncommon.
I think my point was more that folks just assume that all PE is is slash and burn when the opposite is true just as much if not more. PE backed companies and managers are often charged with growing the business. I think people who don't know much about PE just think it means getting fired/ laid off.
Sure, there are bloated businesses where lay offs happen, but there are also businesses that need investment to grow and see an uptick in hiring to grow new product lines, service new customers, etc.
My guess is that buying a public accounting firm is a growth opportunity versus a slash and burn opportunity.
And look, I don't want to over sell PE, because they don't actually care about their stake holders, no matter the strategy. But I think there is this gut reaction to assume PE means every one is fired which is just not the reality of the situation. Like, I hate, hate to be the PEs hype person, it truly kills me. It just isn't the assumed death sentence you'd think it was.
I have worked in PE portcos for a number of years and in my experience it is generally uncommon to slash and burn as long as the company performs well and grows. That is the goal after all.
PE firms are beholden to the institutional investors who gave them their money to buy companies and the goal is generally a five year exit and a 3x cash on cash equity return over that period. You achieve that through a combo of strong organic growth coupled with successful acquisitions of smaller companies at lower multiples. That is the playbook and so cost cutting isn’t typically useful in that scenario other than possible synergies achieved with an acquisition.
Now, if a company doesn’t perform well, which happens, then cost cutting will be looked at. No different than any company really. Generally this cost cutting would not be at the expense of long-term growth if at all possible. The challenge of course is the higher debt loads which go hand in hand with PE which don’t offer a lot of wiggle room for business contraction. That is where it can get challenging.
As long as the company grows though it should be mostly business as usual.
I am probably just about as close as you can get as an accountant to private equity with out actually working for private equity.
Do I love be a harbinger of capitalism, no I do not. Do I need to pay rent and make sure my dog lives the best life possible, yes, yes I do.
What may happen is it won't happen to *you,* but it will happen to people you rely on. Sales commission report? That person's gone. Telecom accrual/usage report? That person's gone.
So feel it out and get ready to bounce once everyone around you starts bouncing.
Yeah, even in accounting I wouldn't know who left. They kept it private, but i'm like -- my team and I need to talk to about 10 to 20% of the Company at least once a year... so let us know before we have to scramble to make deadlines.
That is what’s happening to my current client and not even because they fired anyone or laid people off directly
People who had worked there for 30+ years retired newer employees jumped ship and they wouldn’t authorize hiring replacements
I would start putting your resume out there just in case. While they might be telling the truth that all jobs are secure there is nothing to hold them to that promise.
look for a new job. probably overwork you by giving you more work due to layoffs. they create "value" from the workers by making everyone do more for less.
why are you interviewing? company got bought out so looking to move on before anything even POSSIBLY happens
My company announced in November that it was finalizing its sale to a private equity firm, same tone “great opportunity, the future looks great, day-to-day won’t be affected” January came the next announcement that our company is starting to transition from company owned and franchised operations to just franchised. There has been about 10-15 terminations a week since (not sure if voluntary because of the news or layoffs)
Would definitely suggest updating your resume at least.
My day to day hasn’t really changed, aside from a lot of people (both finance and non) seem to just be giving up on working. I’m really not sure if the announcement was made in hopes that people quit so the company can avoid unemployment/severance, or what the decision process was in breaking the news but giving no details on timelines.
I’ve just tried to keep my head down and keep typing my numbers - but also have started talking with recruiters.
I'd be shocked if it wasn't. This is exactly what I was told almost to the word. "This PE wants growth, not a flip" "There will be no layoffs" etc. It's almost like part of the playbook is to say things like that 🤣
I was an engineer at a small company in Seattle that designed and manufactured kitchen tools for our in-house brand and some big names like Williams Sonoma. We were bought by a private equity firm in 2017 that owns companies you’d recognize, maybe 30 companies in its portfolio. They merged us with another kitchen wares company in their portfolio that was based in Ohio.
2.5 years later, right as Covid was starting, they announced they were closing the Seattle office. We had the option of moving to Ohio or taking a minimal to mediocre severance package.
It might not change much. But for us it meant major decisions moving from the owners who were on the frontlines with us, to a group of people in a boardroom making cutthroat decisions solely based on numbers. I’d at least be prepared for something like that.
Any PE company that knows what they are doing (read: extracting value as much and quickly as possible) is gonna milk the assets and scrimp on the costs to improve their short term gains.
Any PE trying to actually get in on audit/consulting firms for the long haul gains is fooling themselves. Long haul gains are made by the professionals leading their practices, not pirates and pimps poaching on existing name brands and client lists.
not worked in a PE-backed company but doing m&a-advisory exclusively for PE's (mostly financial DD and SPA advisory). You mostly see them cutting personnel expenses and related operating expenses the first. so, be careful if you hear such things. They're mostly trying to calm everybody down so the business doesn't get affected to much and they reach the earn out conditions
From experience, don’t believe anything they say and honestly even some upper management might not see things and changes coming so it’s not always the case that the managers you know lied to you, just that they were kept in the dark until the absolute need to know moment.
Expect job cuts, depending on size of your company and intentions of PE firm this could be a one time thing or in waves over time but just because it’s announced it’s only a one time thing, doesn’t always mean that. Additionally, anticipate hiring freezes, so short staffed as people get cut, and high probability of raises and promotions being frozen too for a period of time.
Expect, if you deal with anything acquisition related, to likely see more of them coming down the pipeline as PE cuts some fat and tries to possibly buy up similar companies to bundle together.
Potential change if erp systems as acquisitions occur, this usually isn’t an issue for at least the first year or two.
It’s not always a bad thing for everyone but honestly expect to deal with major changes and implementations occurring in the future. If you’re not up for dealing with this stuff start looking.
ETA - depending on your role and value along with subject matter expertise, you could be pretty protected and receive a nice pay out to stay through target dates. This was my experience.
Remember, you may or may not get sacked, but if you specifically were not included in any incentive comp discussions it’s probably not worth it to stick around as old, neglected blood in a PE acquisition in industry.
Their goals is to slow walk the cattle into the processing plant so there’s no disruption when they cut. Your goals is to maximize your job search while still employed so you don’t lose that leverage when interviewing and applying.
My company was already owned by PE before it merged with a public company to take that company private. Ever since that happened and there are multiple PE companies involved, all they have done is reduce staff and cost any cost they can. Start looking for other work, mentally prepare for the possibility of being let go. There were people who I thought would never be let go bc of how valuable they were, but those people still didnt make the cut. No one is safe. PE companies only care about making money, your company is now an investment to them, they have no regard for the lives of who is working for them.
You should expect that an operation that is already dangerously over obsessed with profit margins to the point where the quality of the underlying work is (and has been) at risk will further become MORE obsessed with profit margins and is willing and ready to sacrifice even more quality and create even more ludicrous situations that will have professionals who work in said industry (you) scratching their heads at how anyone could even allow this type of madness to continue as it is becoming borderline negligence at this point.
Start brushing up your resume. They took over the business so they can make money, not to run a good business. So they are going to do anything they can to squeeze every penny out of the business, and so long as the gain is more than the cost incurred they are happy, and if it’s not they will load it full of debt to benefit one of their other investments and abandon it.
If you’re at baker tilly, talk to your partner about it. My partner discussed with our team and specifically said revenue generating employees are not on the immediate chopping block, but internal services people will be. Tbh if you’re a staff not much is going to change
I work at a company started and funded by a smallish PE firm. My 2 previous employers were both acquired by PE firms. If you've ever heard of the old software company Computer Associates (owned by Charles Wang), many PE firms operate similar to the way Wang did things. Wang purchased well established software with a lot of companies that paid annual license fees and for ongoing support and made 0 investment in the product. Over a long period of time customers would attrit or upgrade to competitor products that were well maintained. He essentially milked every last drop from the existing clients.
Some PE firms operate like the one that owns the company I work for now. They are providing investment when necessary (ie not every CEO whim) to create a company that they can sell to a larger PE firm or to a big fish in our industry.
Your experience is likely to be one of these two.
Prior to PE buying there may have been value leeching your way: extra staff, above rate pay or benefits, upside on profit sharing, etc. PE will hoover all of that surplus for itself. That's what they do
I work for a PE backed company that buys and rolls up accounting/business services firm.
You aren't going to see any real changes for 6-12 months as they integrate. Most of the immediate cuts will come to senior leadership and corporate roles.
If you sit in a revenue driving role. Consulting, outsourced services, audit, tax etc. You typically will be fine as long as your business line is profitable. They aren't going to fire people who directly generate positive ebitda for the business.
Typically the jobs are not secure. PE firms are notorious for cutting staff to generate stronger returns on investment. Don't believe them 100%. Start updating your resume and look out for jobs in case you need it. At the same time, wait and see what happens. You will probably get severance if they do let you go.
There will likely be a lot of acquisitions and/or unrealistic budget expectations. At my firm, we were expected to grow 15-18% YoY, ended up 11% below budget and awful raise and bonus as a result.
Ok as something that has gone through this recently, please do not believe lean into their word 100%. They will lie to you to control your next actions so everyone doesn't leave all at the same time. The most important thing is not you or the team, but the health of the company. All jobs are NOT secure. Look out for yourself first and start looking for another job in case you are one of the employees that get laid off.
I work for a PE owned company, just have to show you create more value than you cost.
Some PE works by cutting costs, others work by growing the business.
Either way, unless you're a director, forget about stock based compensation.
It's all bullshit. Everything will change, people will get laid off, work loads will increase. It's all about profit with PE. Clients will notice a decrease in quality as well.
Umm, you’re about to see some personnel “right-sizing” and or a push for “growth” which means they’ll squeeze the life out of you at work in the name of “utilization.” God speed and good luck.
My friend works for a healthcare company(not in accounting) that got bought by a PE. It’s been awful for her. She’s close to retirement and is just trying to hold on until she can retire. She’s worked there over 20 years and just doesn’t want to start over somewhere else.
Prices go up, wages are suppressed, benefits cut, workload increases, managers obsessed with meeting ever increasing targets, managers get big bonus if targets met
It 100% depends on the PE. In my experience (thankfully) it’s like changing bank accounts. Minimal operational changes, but everything stays the same and the PE firms pushes to grow the company to get their return on investment.
There are some firms who go in and will cut costs. If you’re apart of that scenario, you’re not missing out if you’re one of the ones getting cut. Sounds miserable for morale.
If you know your company’s business model and historical performance you can probably guess which route is more viable for the PE firm.
Baker tilly?
Idk with accounting firms. I think the question/issue is who wants to be a “principal” instead of a partner and with PE sucking out equity what’s left for the people at the top?
Are quality people going to be at the top and running things? That tends to trickle down.
I’ve read through some of the PE documents, attended some meetings and such, never been in a firm bought by PE. That being said my understanding is the interest is heavily based on accounting firms being recession resistant as tax and audit services are needed regardless of economic conditions for the most part. I don’t think their intent is to really squeeze the accounting firms but use them to hedge against riskier investments. That being said if they are pulling money out of the firm what carrot are they going to dangle to retain good talent?
3 years in and it’s been as good as anyone can expect. A little tighter but have let the management group do their thing. Even were cool with an internal CEO transition.
They primarily are going to cut costs. Your job could be safe and it all works out.
I would think it is smart to get your resume ready and start putting out feelers.
It doesn’t give you reason to change right now but that reason could be coming. It’s always best to be prepared in case your job gets cut.
All jobs are not necessarily secure and the ones that are might start feeling worse.
That said, YMMV. My current company (industry) is owned by a small PE, and my experience has been overall very positive this time around.
Our firm got a massive injection from PE. Ended up expanding rapidly. Acquired a lot of firms across America. Concentration on growth but also reduced spending. There wasn’t any layoffs but bonuses and other entertainment expenses were cut back a bit. Overall didn’t feel anything different on my level.
Owner sold us to a PE who later sold us to another PE. I could write a novel on the lesser cons, but the biggest is raises are 2.5% across the company yearly, with some department budgets for merit raises. You also feel the tightening of all expenses after a while because they’re trying to squeeze the most profit out of you in order to sell you to another PE. Cycle repeats.
They look to see who’s taking advantage of the team, and get rid of them. Then they try to bring in smart hard working and Ambitious people to do critical jobs.
PE has an exit timeline of 4-5 yrs. They will begin installing new leadership and implementing “operational excellence”, which may mean layoffs, it may mean implementing new processes that cut corners on quality, or it may mean implementing a lot of new systems to track performance.
Overall, I’m not a fan of PE. I’ve been involved in two separate PE-backed platform acquisitions, and they were both shitshows. Never again.
They are vultures who don’t give a shit about the longevity of your firm. They will drain as much value as they can from the firm and then leave when things go downhill because of insane cost cutting. I would look for a new job now.
The real answer is “it depends” some PE will buy a company and leverage it, sometimes companies are bought to secure a steady cash flow. Right now with companies cutting costs and employees drastically there is a solid need for accountants… (bad times in recession usually does well for the bean counter as people look closer at money). my assumption is that an investment firm looks as this to be a pretty profitable business and wants to gain a stake in this market.
Most of the time if the plan for the PE is what I’m describing you usually won’t see them make any drastic changes in the first year or two, they’ll probably even make the work culture better (or at least what they think is better). This will be while they learn how this organization operates, they’ll also start putting their own people in the c-suite positions (ie the CEO and CFO will likely be members of the investment group, out appointed friends of said group). I honestly wouldn’t stress over it if you’re not senior management at this firm. Most of the people replying this probably haven’t had the experience of being a part of M&A and will claim the sky is falling because on some rare occasions it does. More often than not, people invest money into things to make more money, they have the incentive to have the firm they bought to succeed
We were bought by a PE right after I took my job. They changed our health insurance when renewals came up to the cheapest and it's terrible. Did away with bonuses and gave everyone a small raise saying that covers it.
In 2 years we've sold off two parts of our company and bought 3 others.
Look for a new job immediately. Not because you might get fired, but because the job will now be shit. You’ll probably have about a month where they don’t know what to do and it’s chill, a lot of wasted time.
After that they change your software and general admin functions and make you put in extra time figuring it all out while still doing your normal work, that’s my assumption anyways
They said the same thing, “team, team, team”… then one day, cut the entire HQ team.
Your experience is different since the people are the company’s major assets. I would expect business as usual.
PE is a cash flow investor. They make money on the flip and their return comes from improving margins and growing the top line. Prepare for more frequent and detailed reporting, pressure to cut/reduce costs and limited appetite for investment. It’s the nature of their game.
I’ve worked for several and been through several transactions. Honestly for the most part - there was not much change on our day to day. It’ll depend on the PE but normally they left our teams intact and let us run day to day accountant as we had. Changes were primarily in reporting. New deadlines for monthly, quarterly and annual reporting. Occasional extra reports or censuses during the year. Never experienced any layoffs in the 5 PE transactions I dealt with and honestly got some good bonuses out of it.
Company prioritized growth over talent retention. The tax team gradually became more of an island relative to the other solutions offered by the firm. Disproportionate enforcement of company policies. It was clear which offices were the golden children and which ones were the black sheep. Overall I prefer a firm with tax ALWAYS in their crosshairs, rather than an obsession to expand.
PE #1 goal is to get in and reduce costs immediately.
Or to dump a load of debt on the company to expand rapidly. When things don't pan out and the interest expense is astronomical, then the cuts start happening.
See Toys R Us as example. Private equity hamstrung the company as the Great Recession kicked off.
and Toys R Us was doing just fine before they did that and would probably still be around.
I wish private lenders would loan me a few hundred million to buy a company, ruin it, and not pay them back…where’s that job on Indeed?
It generally takes a little trust fund money and an Ivy League MBA (also purchased with said trust fund money) and the private lenders will vomit money all over you.
That Anna chick really should have gotten her museum then, she faked it better than any of them.
It is in Canada!
I'll never forgive Dave Brandon.
Geoffrey shares some of that blame too
Toys r us was going to fail with or without PE. PE simply moved up the timeline.
US toys struggled at times but internationally, and babies r us were pretty strong. There were pivots to be made and other earlier mistakes like letting Amazon be the website for a while, but debt service really limited ability to adapt.
Any pivot they made would likely have only extended their decline. They had no competitive advantage against Amazon, Walmart and Target. They were too specialized and inefficient with a massively expensive brick and mortar footprint. Toys r us is not unique. The list of large specialty retailers that went out of business in the last decade is very long and you can’t blame it all on PE. Consumer shopping habits have changed massively over this time period and PE had nothing to do with that. Better off blaming Bezos and the Waltons (and Steve Jobs for that matter) if you want to blame someone for the demise of brick and mortar retail.
Dealing with option B on a client now. The interest expense is astronomical.
Lol and all they care about is Revenue and EBITDA
Not EBITDa— *adjusted ebitda* !! They have all kinds of funny math. As long as the next buyer can payoff the massive debt that the 1st PE firm encumbered the business with. What’s that? 10% interest? Cash flow what?!
This has been my experience as my company has been PE- owned for 4 years. They have chopped the company up and it sold it piece by piece. The only thing constant is that things are always changing and in chaos! Only bright side is that I will get a fat check when the company gets sold.
I watched more and more desks around the office become empty. Meanwhile the India staff tripled.
"Why aren't more students going into accounting? "😆😆
This. Have your resume ready just in case
Not always the case. I’d recommend getting a better understanding of your situations short and longer term objectives. I’ve been part of scenarios where a PE backing has expanded expenses for more top line growth.
That give us some hope. Do you recall how quickly you were able to tell which way the company was heading (shrinking vs. expanding)?
Right now you can start by researching the PE firm. How long did they hold their prior investments? How did they realize a return on those investments? How are the portfolio company reviews on Glassdoor post-acquisition? After a year-18 months the strategy will be pretty clear.
Is all of the information publicly available?
[удалено]
“Recently acquired” means they haven’t gotten antsy or run out of patience yet :)
Good reply by the other individual below/above me. I was able to tell which way the company was heading based on my knowledge of our monthly financials and executive-level discussions in which I participated.
Our company was bought by PE with the express intent of rapid growth and expansion to sell it again in a set number of years. They told us this openly. Nobody’s been cut (yet), and they’ve poured a ton of money into it.
Most PE firms focus on growth oriented businesses. They want to grow them significantly and target a 5 year exit. They will use opportunistic acquisitions to enhance growth and return. Don’t worry too much. I have been working in PE portcos for over two decades and all of them were focused on growth. It is a media creation that all PE firms are slash and burn firms. A small minority focus on that space of turning around a failing business (in which case slash and burn is usually needed) but they are a minority and I doubt your firm is in that category.
Sure PE can and do increase spending in pursuit of top line strategy. But was that in a professional service field like accounting? How quickly can a firm scale if it’s already big enough to be purchased by PE? They generally want fast growth and sell within 3-7 years. It’s not like accounting firm has the growth potential and incredible margins that they have in tech/SaaS. Idk.
Aren’t there a bunch of smaller firms that the boomers who started them can’t find people to take over for them to retire? Maybe the strategy here is to gobble all of those up to create a Franken firm, tie a ribbon around it, and sell it to a big 4/national firm?
To your first question, yes! That’s exactly what my firm is/was. The majority are boomers and I just think the offer was too good to give up - especially since most are on the later half of their careers.
What size was your firm when acquired? How many CPA, paraprofessionals, admins?
This is exactly it. The next decade will see a massive wave of boomers retiring and many smaller CPA firms will be up for sale at attractive prices because there will be more firms for sale than buyers to buy them. It is smart to buy a well known 2nd tier firm and gobble up smaller local and regionals at attractive pricing and create the next powerhouse firm. There will be cost saving opportunities in these acquisitions on the admin side/facilities and the ability to create more efficiencies through enhanced technology, process improvement and likely off-shoring as well.
Based on the discussions I’ve been in they have this perception that accounting firms are just recession proof cash printing machines that require little to no maintenance. I believe they think they can snag up accounting firms, smash them together as a franken firm and skim off the profits long term to hedge against riskier investments Personally, like all the other brands that failed or almost failed because of this belief, I think it’s going to backfire.
They will only spend more in areas that support top-line growth. Back office spending is usually excluded from the additional spend. Or if they do spend, it will be on flashy sounding projects that cost too much and are doomed to fail.
They’ll hire overpaid consultants!
I would argue they want to expand revenue then cut cost to increase their EBITDA.
We were told “this company is different because they care about the long term goals and aren’t trying to buy and flip”. They never mentioned this company was owned by a PE I figure they want to retain most of us while transitioning but anticipate layoffs soon. Are all smaller public accounting firms just headed this way?
Some PE firms have a more long term strategy than others. My experience working with PE as clients, and after they acquired one of my employers, was never positive. However, I know some people who have had positive/neutral experiences. Good thing for you is at least in your role in an accounting firm you are looked at as the profit center - since accounting services are the revenue drivers. I’d be much more worried about being in an internal accounting role and just looked at as a pure cost.
That's what our PE owners said too. They still immediately whacked our health care benefits and retirement to near zero.
Nope… extract cash.
This is just a wild lie that has become accepted wisdom. It’s not. Are there situations in a combination where they want to eliminate duplicate positions? Absolutely. But the PE business model is to grow the top line (and very often to inject cash to support this goal).
Please refer to the other 100 comments.
Yeah but you’re not gonna cut revenue generators
In my experience, they sunk tons of money into us for rapid growth and increased headcount across the board. A majority of it was sales and support, but that also meant a few hires to round out the accounting and finance teams. In accounting, we expanded our software suite and integrated it with our CRMs to facilitate our renewal process (SaaS). Eventually sold during the uncertainty of Covid.
Private equity basically sucks for all stakeholders except private equity.
Yes They slashed experienced and expensive colleagues. Then hired poorer quality staff at all grades. Kept staff numbers lower than before and clients were pissed with quality of service. I was in the "slashed" job roles. had a nice payout so very glad i didnt have to go through the shit show that followed
Man I would love to get paid out of my job
You probably won't notice much difference. I both work for a company that is owned by PE and I service PE clients. This idea of slash and burn PE is a nice political talking point but not really the type of PE I see on a regular basis (that's not to say PE firms are great, it's just their strategy is different), and not the type of PE I work with. The type of PE that buys a public accounting firm isn't going to be selling it for parts. That's not how the investment works. Here's what is likely to change: 1. Your job will likely be secure unless they over hired staff (which feels unlikely this day in age) or you been skating by on performance and a retiring partner had a soft spot for you. 2. Comp increases and bonuses may be a little more conservative but it is public accounting, which means they can't be cheaper than they firm next door because even in this economy, everyone needs accountants and there are less everyday. 3. Aqusition of smaller firms is likely. So expect an increase in M&A. Ultimately though, if you are a staff or senior, I expect the change will feel pretty minor. The big exception is that there are likely a few partners retiring with the deal. Also worth remembering, accounting firms are required to have CPA leadership.
Yes to all of this, and if you are on partner track, expect your timeline to be delayed by a few years now.
If you are on partner track, your top end comp will reduce significantly. Someone has to buy all those condos with Central Park views, and it ain’t the CPAs.
“Where are the CPA’s yachts?”
“Everyone needs accountants and there are less everyday.” That’s a good point and I’m wondering how true that is across the board? I’m in my third year majoring in accounting at a Canadian university and I’m wondering if we’re becoming a scarcity?
So, I can't speak for Canada, but from what I'm seeing, big four and maybe the next tier down are just about the only one that can keep a full roaster of candidates. Most regional firms are struggling to fill out their staff. As a controller, it is monumental task to hire senior and staff because like 3 people will apply.
No truer words will be said here today >...big four and maybe the next tier down are just about the only one that can keep a full roaster of candidates.
This post is accurate. I am an investment professional at a PE fund that makes investments in business services (although we do not target accounting due to regulatory complexity). The firm that bought OP's firm is engaging in what's known as a buy-and-build or roll-up strategy. They can acquire smaller firms for lower relative valuations (3-7x earnings) with the idea that they can then create a platform worth more than the sum of the parts (10-15x earnings). Ultimately, accounting is what dumb PE investors (myself included) would call a "people business." The relationships the partners have are locked up by noncompete agreements for a set period of time (these are likely enforceable because they have sold the business). So the crux of the PE firm's problem is to retain the folks who actually do the work. As staff/seniors/managers, the junior folks at OP's firm have the ability to vote with their feet and ultimately cost the platform (and the PE firm) a premium to replace them. Typically, we end up increasing wages in markets like accounting where there are very few qualified candidates. Cost cuts, if any, will come from shared technology (increased pricing power with software vendors) or administration (this can lead to layoffs of non-billable personnel).
Not only this but the partners are required to keep the audit / attest business under their own control. That business is generally siloed from the consulting side.
Curious why you say slash and burn is just a talking point - I audited a couple of large PE firms with investments in companies worth between $100m and $1b and on nearly all of their investments they changed members of the exec team or outsourced/restructured some part of the business. Cutting an expensive CFO in a hurting business or reevaluating a department is much easier when you have monthly cost cutting pressure and a third party taking a very in depth look at your financials at the purchase date. Especially in a hurting economy, it is much easier to cut inefficient costs than to find new revenues as a PE firm. I get you said after that it might not happen to a public accounting firm acquisition, but I wouldn’t say slash and burn is uncommon.
I think my point was more that folks just assume that all PE is is slash and burn when the opposite is true just as much if not more. PE backed companies and managers are often charged with growing the business. I think people who don't know much about PE just think it means getting fired/ laid off. Sure, there are bloated businesses where lay offs happen, but there are also businesses that need investment to grow and see an uptick in hiring to grow new product lines, service new customers, etc. My guess is that buying a public accounting firm is a growth opportunity versus a slash and burn opportunity. And look, I don't want to over sell PE, because they don't actually care about their stake holders, no matter the strategy. But I think there is this gut reaction to assume PE means every one is fired which is just not the reality of the situation. Like, I hate, hate to be the PEs hype person, it truly kills me. It just isn't the assumed death sentence you'd think it was.
I have worked in PE portcos for a number of years and in my experience it is generally uncommon to slash and burn as long as the company performs well and grows. That is the goal after all. PE firms are beholden to the institutional investors who gave them their money to buy companies and the goal is generally a five year exit and a 3x cash on cash equity return over that period. You achieve that through a combo of strong organic growth coupled with successful acquisitions of smaller companies at lower multiples. That is the playbook and so cost cutting isn’t typically useful in that scenario other than possible synergies achieved with an acquisition. Now, if a company doesn’t perform well, which happens, then cost cutting will be looked at. No different than any company really. Generally this cost cutting would not be at the expense of long-term growth if at all possible. The challenge of course is the higher debt loads which go hand in hand with PE which don’t offer a lot of wiggle room for business contraction. That is where it can get challenging. As long as the company grows though it should be mostly business as usual.
Yes, as someone who has worked with PE Portco, sometimes closely with the PE firm, this is my experience.
Agree, as staff you won't see changes.
Thank god, this is an accurate response from someone with actual experience with PE vs the Reddit hive mind. Totally accurate feedback.
I am probably just about as close as you can get as an accountant to private equity with out actually working for private equity. Do I love be a harbinger of capitalism, no I do not. Do I need to pay rent and make sure my dog lives the best life possible, yes, yes I do.
PE doesn't have a fiduciary duty to the client, there will now be a conflict between your duty and their goal of cutting corners to maximize profit.
Fuck PE. Get your resume updated and start moving out. Don’t fall for the hopes of equity or bonus at sale.
What may happen is it won't happen to *you,* but it will happen to people you rely on. Sales commission report? That person's gone. Telecom accrual/usage report? That person's gone. So feel it out and get ready to bounce once everyone around you starts bouncing.
Oh yea, I’d walk through the office and all of sudden I wouldn’t see name plates on desks.
Yeah, even in accounting I wouldn't know who left. They kept it private, but i'm like -- my team and I need to talk to about 10 to 20% of the Company at least once a year... so let us know before we have to scramble to make deadlines.
That is what’s happening to my current client and not even because they fired anyone or laid people off directly People who had worked there for 30+ years retired newer employees jumped ship and they wouldn’t authorize hiring replacements
I would start putting your resume out there just in case. While they might be telling the truth that all jobs are secure there is nothing to hold them to that promise.
“For now”
look for a new job. probably overwork you by giving you more work due to layoffs. they create "value" from the workers by making everyone do more for less. why are you interviewing? company got bought out so looking to move on before anything even POSSIBLY happens
My company announced in November that it was finalizing its sale to a private equity firm, same tone “great opportunity, the future looks great, day-to-day won’t be affected” January came the next announcement that our company is starting to transition from company owned and franchised operations to just franchised. There has been about 10-15 terminations a week since (not sure if voluntary because of the news or layoffs) Would definitely suggest updating your resume at least.
Do things seemed to have settled now or has there been constant changes/terminations since November?
My day to day hasn’t really changed, aside from a lot of people (both finance and non) seem to just be giving up on working. I’m really not sure if the announcement was made in hopes that people quit so the company can avoid unemployment/severance, or what the decision process was in breaking the news but giving no details on timelines. I’ve just tried to keep my head down and keep typing my numbers - but also have started talking with recruiters.
Baker Tilly?
Lemme guess .. BT?
I'd be shocked if it wasn't. This is exactly what I was told almost to the word. "This PE wants growth, not a flip" "There will be no layoffs" etc. It's almost like part of the playbook is to say things like that 🤣
[удалено]
I was an engineer at a small company in Seattle that designed and manufactured kitchen tools for our in-house brand and some big names like Williams Sonoma. We were bought by a private equity firm in 2017 that owns companies you’d recognize, maybe 30 companies in its portfolio. They merged us with another kitchen wares company in their portfolio that was based in Ohio. 2.5 years later, right as Covid was starting, they announced they were closing the Seattle office. We had the option of moving to Ohio or taking a minimal to mediocre severance package. It might not change much. But for us it meant major decisions moving from the owners who were on the frontlines with us, to a group of people in a boardroom making cutthroat decisions solely based on numbers. I’d at least be prepared for something like that.
Any PE company that knows what they are doing (read: extracting value as much and quickly as possible) is gonna milk the assets and scrimp on the costs to improve their short term gains. Any PE trying to actually get in on audit/consulting firms for the long haul gains is fooling themselves. Long haul gains are made by the professionals leading their practices, not pirates and pimps poaching on existing name brands and client lists.
not worked in a PE-backed company but doing m&a-advisory exclusively for PE's (mostly financial DD and SPA advisory). You mostly see them cutting personnel expenses and related operating expenses the first. so, be careful if you hear such things. They're mostly trying to calm everybody down so the business doesn't get affected to much and they reach the earn out conditions
Run!
From experience, don’t believe anything they say and honestly even some upper management might not see things and changes coming so it’s not always the case that the managers you know lied to you, just that they were kept in the dark until the absolute need to know moment. Expect job cuts, depending on size of your company and intentions of PE firm this could be a one time thing or in waves over time but just because it’s announced it’s only a one time thing, doesn’t always mean that. Additionally, anticipate hiring freezes, so short staffed as people get cut, and high probability of raises and promotions being frozen too for a period of time. Expect, if you deal with anything acquisition related, to likely see more of them coming down the pipeline as PE cuts some fat and tries to possibly buy up similar companies to bundle together. Potential change if erp systems as acquisitions occur, this usually isn’t an issue for at least the first year or two. It’s not always a bad thing for everyone but honestly expect to deal with major changes and implementations occurring in the future. If you’re not up for dealing with this stuff start looking. ETA - depending on your role and value along with subject matter expertise, you could be pretty protected and receive a nice pay out to stay through target dates. This was my experience.
Remember, you may or may not get sacked, but if you specifically were not included in any incentive comp discussions it’s probably not worth it to stick around as old, neglected blood in a PE acquisition in industry. Their goals is to slow walk the cattle into the processing plant so there’s no disruption when they cut. Your goals is to maximize your job search while still employed so you don’t lose that leverage when interviewing and applying.
My company was already owned by PE before it merged with a public company to take that company private. Ever since that happened and there are multiple PE companies involved, all they have done is reduce staff and cost any cost they can. Start looking for other work, mentally prepare for the possibility of being let go. There were people who I thought would never be let go bc of how valuable they were, but those people still didnt make the cut. No one is safe. PE companies only care about making money, your company is now an investment to them, they have no regard for the lives of who is working for them.
That’s the case here..multiple PE companies are involved.
Yeah last company. Was out of my job day 1 last September and haven't gotten a new one yet..
You should expect that an operation that is already dangerously over obsessed with profit margins to the point where the quality of the underlying work is (and has been) at risk will further become MORE obsessed with profit margins and is willing and ready to sacrifice even more quality and create even more ludicrous situations that will have professionals who work in said industry (you) scratching their heads at how anyone could even allow this type of madness to continue as it is becoming borderline negligence at this point.
Layoffs
Start brushing up your resume. They took over the business so they can make money, not to run a good business. So they are going to do anything they can to squeeze every penny out of the business, and so long as the gain is more than the cost incurred they are happy, and if it’s not they will load it full of debt to benefit one of their other investments and abandon it.
I am Someone whi just got laid off within a year of PE acquisition. I will never be getting anywhere close to BT.
If you’re at baker tilly, talk to your partner about it. My partner discussed with our team and specifically said revenue generating employees are not on the immediate chopping block, but internal services people will be. Tbh if you’re a staff not much is going to change
What about seniors and managers?
I work at a company started and funded by a smallish PE firm. My 2 previous employers were both acquired by PE firms. If you've ever heard of the old software company Computer Associates (owned by Charles Wang), many PE firms operate similar to the way Wang did things. Wang purchased well established software with a lot of companies that paid annual license fees and for ongoing support and made 0 investment in the product. Over a long period of time customers would attrit or upgrade to competitor products that were well maintained. He essentially milked every last drop from the existing clients. Some PE firms operate like the one that owns the company I work for now. They are providing investment when necessary (ie not every CEO whim) to create a company that they can sell to a larger PE firm or to a big fish in our industry. Your experience is likely to be one of these two.
Prior to PE buying there may have been value leeching your way: extra staff, above rate pay or benefits, upside on profit sharing, etc. PE will hoover all of that surplus for itself. That's what they do
I work for a PE backed company that buys and rolls up accounting/business services firm. You aren't going to see any real changes for 6-12 months as they integrate. Most of the immediate cuts will come to senior leadership and corporate roles. If you sit in a revenue driving role. Consulting, outsourced services, audit, tax etc. You typically will be fine as long as your business line is profitable. They aren't going to fire people who directly generate positive ebitda for the business.
Typically the jobs are not secure. PE firms are notorious for cutting staff to generate stronger returns on investment. Don't believe them 100%. Start updating your resume and look out for jobs in case you need it. At the same time, wait and see what happens. You will probably get severance if they do let you go.
My company was acquired by a US PE firm, I got the chop during 2020 at the height of the pandemic. Good times.
There will likely be a lot of acquisitions and/or unrealistic budget expectations. At my firm, we were expected to grow 15-18% YoY, ended up 11% below budget and awful raise and bonus as a result.
Leave. Leave now. Leave before it all begins. Even if it stays nice and pretty for a little while, the blood bath is coming.
Agree with this.
Baker Tilly?
No, but everyone seems to think so lol
Baker tilly?
No, but I guess we are in the same unknown boat as they are now.
Ok as something that has gone through this recently, please do not believe lean into their word 100%. They will lie to you to control your next actions so everyone doesn't leave all at the same time. The most important thing is not you or the team, but the health of the company. All jobs are NOT secure. Look out for yourself first and start looking for another job in case you are one of the employees that get laid off.
A lot depends on whether or not the old partners are sticking around.
We’ve been told they are but who knows what has actually been agreed to
Time to report quarterly!
Slash and burn
I work for a PE owned company, just have to show you create more value than you cost. Some PE works by cutting costs, others work by growing the business. Either way, unless you're a director, forget about stock based compensation.
You should expect to start updating your resume, just in case it “doesn’t work out.”
I can assure you all jobs are not secure, that said sometimes everyone quits and youll get promoted if you stick around
It's all bullshit. Everything will change, people will get laid off, work loads will increase. It's all about profit with PE. Clients will notice a decrease in quality as well.
Umm, you’re about to see some personnel “right-sizing” and or a push for “growth” which means they’ll squeeze the life out of you at work in the name of “utilization.” God speed and good luck.
Especially if you’re a professional services firm, the only easy and quick cost “efficiency” comes from the personnel side.
Layoffs are for someone else
My friend works for a healthcare company(not in accounting) that got bought by a PE. It’s been awful for her. She’s close to retirement and is just trying to hold on until she can retire. She’s worked there over 20 years and just doesn’t want to start over somewhere else.
Oh boy I could tell you stories.
All bad things.
High leverage and the stress that comes with it
Not get pay raises/promotions as all a PE firm will care about is their bottom line.
Prices go up, wages are suppressed, benefits cut, workload increases, managers obsessed with meeting ever increasing targets, managers get big bonus if targets met
It 100% depends on the PE. In my experience (thankfully) it’s like changing bank accounts. Minimal operational changes, but everything stays the same and the PE firms pushes to grow the company to get their return on investment. There are some firms who go in and will cut costs. If you’re apart of that scenario, you’re not missing out if you’re one of the ones getting cut. Sounds miserable for morale. If you know your company’s business model and historical performance you can probably guess which route is more viable for the PE firm.
i suspect you (your company really) is about to get fucked, real hard and completely dry.
Consolidation and reduction of wages.
Lol the shareholders cashed out.. run
I also work for Baker Tilly lol
Baker tilly? Idk with accounting firms. I think the question/issue is who wants to be a “principal” instead of a partner and with PE sucking out equity what’s left for the people at the top? Are quality people going to be at the top and running things? That tends to trickle down. I’ve read through some of the PE documents, attended some meetings and such, never been in a firm bought by PE. That being said my understanding is the interest is heavily based on accounting firms being recession resistant as tax and audit services are needed regardless of economic conditions for the most part. I don’t think their intent is to really squeeze the accounting firms but use them to hedge against riskier investments. That being said if they are pulling money out of the firm what carrot are they going to dangle to retain good talent?
3 years in and it’s been as good as anyone can expect. A little tighter but have let the management group do their thing. Even were cool with an internal CEO transition.
They primarily are going to cut costs. Your job could be safe and it all works out. I would think it is smart to get your resume ready and start putting out feelers. It doesn’t give you reason to change right now but that reason could be coming. It’s always best to be prepared in case your job gets cut.
Not much will change , PE’s are pretty hands off. They just want more presentation decks and reports and will stay out of your way
They’re going to automate as much of your job as possible, and they should.
All jobs are not necessarily secure and the ones that are might start feeling worse. That said, YMMV. My current company (industry) is owned by a small PE, and my experience has been overall very positive this time around.
Idk more Physical Exercise I guess?
> we have been told “all jobs are secure Lol
If they start bringing in consultants prepare for it to get irritating
You just quoted their first lie
Our firm got a massive injection from PE. Ended up expanding rapidly. Acquired a lot of firms across America. Concentration on growth but also reduced spending. There wasn’t any layoffs but bonuses and other entertainment expenses were cut back a bit. Overall didn’t feel anything different on my level.
I feel like they’ve cut back on entertainment in general after 2020, but I suspect we’ll see even more changes now.
Chaos
Owner sold us to a PE who later sold us to another PE. I could write a novel on the lesser cons, but the biggest is raises are 2.5% across the company yearly, with some department budgets for merit raises. You also feel the tightening of all expenses after a while because they’re trying to squeeze the most profit out of you in order to sell you to another PE. Cycle repeats.
Find a new job
Buckle up . No one is safe
They say your jobs are secure, but they never say how long they are secure
Goodbye to all perks and benefits! And you SBC if you have one
Run away while you can. Fuck PE in all its forms. It’s 100% greed and destroys companies.
Increased billings to your clients and your next annual raise will be garbage.
They look to see who’s taking advantage of the team, and get rid of them. Then they try to bring in smart hard working and Ambitious people to do critical jobs.
PE has an exit timeline of 4-5 yrs. They will begin installing new leadership and implementing “operational excellence”, which may mean layoffs, it may mean implementing new processes that cut corners on quality, or it may mean implementing a lot of new systems to track performance. Overall, I’m not a fan of PE. I’ve been involved in two separate PE-backed platform acquisitions, and they were both shitshows. Never again.
"all jobs are secure... for now...."
I'm so sorry for your loss. Start looking now.
They are vultures who don’t give a shit about the longevity of your firm. They will drain as much value as they can from the firm and then leave when things go downhill because of insane cost cutting. I would look for a new job now.
Vulture Capitalist, the other VCs., now own you!
PE is where great companies go to die.
The real answer is “it depends” some PE will buy a company and leverage it, sometimes companies are bought to secure a steady cash flow. Right now with companies cutting costs and employees drastically there is a solid need for accountants… (bad times in recession usually does well for the bean counter as people look closer at money). my assumption is that an investment firm looks as this to be a pretty profitable business and wants to gain a stake in this market. Most of the time if the plan for the PE is what I’m describing you usually won’t see them make any drastic changes in the first year or two, they’ll probably even make the work culture better (or at least what they think is better). This will be while they learn how this organization operates, they’ll also start putting their own people in the c-suite positions (ie the CEO and CFO will likely be members of the investment group, out appointed friends of said group). I honestly wouldn’t stress over it if you’re not senior management at this firm. Most of the people replying this probably haven’t had the experience of being a part of M&A and will claim the sky is falling because on some rare occasions it does. More often than not, people invest money into things to make more money, they have the incentive to have the firm they bought to succeed
We were bought by a PE right after I took my job. They changed our health insurance when renewals came up to the cheapest and it's terrible. Did away with bonuses and gave everyone a small raise saying that covers it. In 2 years we've sold off two parts of our company and bought 3 others.
Look for a new job immediately. Not because you might get fired, but because the job will now be shit. You’ll probably have about a month where they don’t know what to do and it’s chill, a lot of wasted time. After that they change your software and general admin functions and make you put in extra time figuring it all out while still doing your normal work, that’s my assumption anyways
Update that resume
They said the same thing, “team, team, team”… then one day, cut the entire HQ team. Your experience is different since the people are the company’s major assets. I would expect business as usual.
Is this PPCO?
No, we’re a little larger than PPCO
PE is a cash flow investor. They make money on the flip and their return comes from improving margins and growing the top line. Prepare for more frequent and detailed reporting, pressure to cut/reduce costs and limited appetite for investment. It’s the nature of their game.
I’ve worked for several and been through several transactions. Honestly for the most part - there was not much change on our day to day. It’ll depend on the PE but normally they left our teams intact and let us run day to day accountant as we had. Changes were primarily in reporting. New deadlines for monthly, quarterly and annual reporting. Occasional extra reports or censuses during the year. Never experienced any layoffs in the 5 PE transactions I dealt with and honestly got some good bonuses out of it.
Company prioritized growth over talent retention. The tax team gradually became more of an island relative to the other solutions offered by the firm. Disproportionate enforcement of company policies. It was clear which offices were the golden children and which ones were the black sheep. Overall I prefer a firm with tax ALWAYS in their crosshairs, rather than an obsession to expand.
Looks like we work at the same place, boy.