This site is intended to pick up where the Buyout of America book leaves off.

We would like it to be a forum where we tell you what is presently going on with private equity companies, the private equity debate, and list what companies private equity firms bought in leveraged buyouts (LBOs).

In May, President Obama aired his first ad criticizing Romney’s Bain Capital experience focusing on his 1993 buyout of GS Technologies, which in 1992 earned $10 million in operating profit by making steel balls and rods used in mining. I find the ad to be largely accurate. Bain and co-investors put only $24 million down, and had the company borrow $56 million to finance the $80 million deal. After quickly raising profits, they had the company less than one year after the buyout borrow another $61 million to pay themselves a dividend. This left little room for error as operating profit, $32 million in 1995, could barely cover the increased interest expenses, rising from $9 million to $24 million. Romney did not have the patience to see if that profitability level was sustainable. It wasn’t.

Even when profits fell below interest payments in 1998 and 1999 due to cheap imports, there was enough operating profit to survive if not for the interest expense. Former CEO Roger Regelbrugge told me “a better capitalized GS could have ridden out the currency crisis and been a gold mine.” GS instead filed for bankruptcy in 2001.

President Obama on Feb. 22 unveiled plans to reform the tax code including reducing corporate  interest tax deductibility. That would have a big impact on the leveraged buyout industry, which depends largely on this tax break. The law presently allows companies to take the interest they pay on loans, even if used to finance LBOs, off their taxes. Without this loophole, many LBOs would be unprofitable.

A subsequent bi-partisan Senate proposal (Sens Wyden and Coats) calls for a reduction in the corporate tax rate, and a 25 percent reduction in interest tax dedcutibility benefits.

Village Voice Media in an April 24 cover story interviews me about Romney’s Bain record. Powerful feature.

There is a good question and answer segment I had Jan. 12 on how Bain makes money from tax gimmicks, and how our tax laws should be changed. The New Yorker weighs in with a good analysis.

The Daily Show with Jon Stewart Jan. 31 references the book (and shows the cover) in an excellent segment on how Romney and Bain Capital made money by cutting spending at  companies they owned.

On the Jan. 18 PBS NewsHour I debate a partner at a private equity firm about how the PE industry impacts the economy.

Appearing Jan. 13 on Fox Business, I reveal what Romney considered when buying companies and criticize Steve Rattner’s op-ed defending Romney and Bain Capital.

I explain to Lou Dobbs Jan. 12 how Mitt Romney’s claim of creating 100,000 jobs makes little sense since he is combining venture capital investments in which he did not control the businesses, with companies he controlled through leveraged buyouts. TPM has a nice story explaining the difference between private equity and venture capital.

MSNBC’s UP With Chris Hayes interviewed me Jan. 7 to learn about how Mitt Romney made money by hurting businesses (my segment is at the bottom of link).

A Huffington Post columnist says Dec. 30 that Obama advisor David Axelrod is using the Buyout of America as the basis for his Romney attacks.

I explain in a Washington Post Dec. 14 article investigating Mitt Romney’s record at Bain Capital how he did not buy troubled businesses, as he claims, but companies with consistent earnings, in which he could extract dividends.

The influential Daily Kos web-site Nov. 25 said what The Buyout of America reveals about Mitt Romney makes him unelectable.

Nationally syndicated columnist Robyn Blumner Nov. 13 said the Buyout of America showed that Mitt Romney made money by plundering companies.

A Los Angeles Times article does a very good job focusing on Bain’s 10 biggest investments during Romney’s time at the firm. Four of those companies went bankrupt.

A Boston Consulting Group partner in a Los Angeles Times op-ed captures what Romney did at Bain and explains how few would benefit if he ran the country in a similar manner.

My February 2011 story in the New York Post revealed how Mitt Romney’s past made him a Working Class Zero.

The book is about more than Romney’s Bain Capital. We ask you to send in reflections on your experiences with private equity owned companies, which will be shared with readers, and thoughts on the subject.

Portfolio published the paperback of the Buyout of America  Nov. 30, 2010.
There are new updates throughout the book, which is more timely than ever with the public concerned about how Wall Street impacts Main Street.

Private Equity Updates Share Your Experience | Private Equity News

Next Great Credit Crisis Delayed, But Still Looming US cos have $1.2 trillion of below investment grade debt, much from LBOs, that needs to be refinanced from 2012 through 2017 (most from 2014-17), according to a July 2011 MB Global Partners report. Cos refinanced $398 billion of loans, extending repayment from 2011 to 2014,  but banks without Fed stimulus may not be so forgiving in the future.   The Lack of Private Equity Growth Story A Moody’s December 2011 report found the 40 biggest US LBOs in the 2006-08 period had revenue growth of four percent through June 30, 2011 compared to 14 percent for the broader universe of non-financial rated companies. But earnings kept pace with peers indicating “PE firms may have been more aggressive in reducing costs.”

WATCH & LISTEN»

Josh Kosman Debating the merits of Private Equity March 3, 2011 at Sciences Po University, Paris Watch Josh Kosman speak»|Watch Panel Discussion (heated exchange starts at 42:00)»

Josh Kosman speaking at media lauch party for the November 17 release of the paperback edition of Buyout of America at the Empire Room (on the ground floor of the Empire State Building) where the crowd drunk "Screwed Worker" cocktails. Watch Josh Kosman's speech»

Featured on PBS Newshour's Potential Risks of Buying Companies on Borrowed Money Examined on July 16, 2010 Watch PBS NewsHour Report»

Listen to NPR's Joshua Kosman, Predicting The Next Credit Crisis on November 16, 2009 Listen to NPR Radio: Fresh Air with Terry Gross»