[anigbrowl]

Link goes to video. Article (including video) on one page: http://www.nytimes.com/2009/10/05/business/economy/05simmons...

starts out rather polemic but really quite interesting, not to mention disturbing. A cautionary tale for mid-size firms that decide to seek private equity rather than an IPO.

THL was hardly alone in undertaking this sort of financial engineering, known as a dividend recapitalization. From 2003 to 2007, 188 companies controlled by private equity firms issued more than $75 billion in debt that was used to pay dividends to the buyout firms. Asked whether the 2007 dividend was too much for Simmons, Mr. Schoen of THL defended the deal. “That debt financing, which clearly spelled out to the market the use of the proceeds, was extremely well received. The securities were heavily oversubscribed,” Mr. Schoen said. “Not only did we think it was appropriate, but the market did as well,” he added.

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