Altavair
PE-OWNED
Acquired by KKR
What PE Will Likely Do
Altavair will take on significant debt to finance the acquisition, which will be used to pay dividends to KKR rather than reinvested in the business
Altavair will likely close underperforming locations and reduce inventory levels to improve short-term cash flow
Altavair will defer maintenance and updates to its facilities and equipment to cut costs, leading to a noticeable decline in the quality and condition of its offerings
As cost-cutting measures intensify, the quality and selection of Altavair's products/services will likely deteriorate, with customers experiencing things like reduced functionality, shorter warranties, and inferior materials
Expected Timeline
“0 to 6 months months”
Announcements about 'transforming' and 'optimizing' Altavair's operations
“6 to 12 months months”
First round of location closures and staff reductions announced
“12 to 24 months months”
Customers begin to notice degradation in product/service quality and selection
“24 to 48 months months”
Bankruptcy rumors surface as more aggressive cost-cutting measures are implemented
“48 to 60 months months”
Potential bankruptcy, restructuring, or fire sale of Altavair's assets
What You Can Do
Actions
Be cautious about purchasing Altavair's products/services, as the quality and reliability may decline over time
Consider alternative providers that are not owned by private equity firms with a history of cost-cutting and debt-loading
Monitor Altavair's financial performance and news coverage for signs of trouble, and be prepared to seek alternative options if the company's offerings begin to deteriorate
Alternatives
Look for family-owned or employee-owned businesses