As if on cue, on the topic of interest rate sensitivity and rosy assumptions, I find today a reference in The New York Time's "DealBook,"citing the always wonderful "TheDeal.com" (home to one of my favorite reporter/editor/wine guru) to a botched LBO in the form of Werner Company, a ladder maker now the victim of leverage, floating rates and the rising price of aluminum. Says DealBook:
Werner Company, backed by private equity firm Leonard Green & Partners, also cites its “highly leveraged capital structure” as contributing to its problems, according to TheDeal.com. “Quite simply, we have too much debt,” said Steven P. Richman, the chief executive.
Sure, debt is part of it, I think to myself, but it is awfully convenient that management has a built-in failure excuse, no?
