Guitar Center has bought an AV integration company in Chicago- if they run that the way they handle things with their own vendors, I expect a lot of unpaid bills and other fallout.

[Link: prnewswire.com]

[Link: marketwatch.com]

I imagine theres only one person thats super happy and excited about this...

Comcast struggles with their "field team". I don't know what else to call the technicians and management people. This field team has a single company with a single set of rules and way of doing things and they struggle.

The point I am trying to make here is that Everytime I hear about small businesses being aquired and rolled up I immediately think "when will this blow up?"

Guitar Center lacks the monopolistic hold on their customers that Comcast has. From those articles it looks like they are broke. How on Earth will they survive long enough to tame design/engineering/service/installation teams from these rolled up companies?

IMO "rollups" are just cash grabs for a few at the top. Everyone else loses.

I just looked at the website for the company they bought. Under the residential categories I think I saw about 8 different manufacturer interfaces. Im sure this will work out fine...

Meanwhile, back at the hall of justice, Im reading this while waiting on Centurylink to show up to fix the network on a project where they convinced the client they were the best choice for the IT support. Im 4 hours into my day with my thumb up my ass

Could be worse, at least you are getting paid. Most of the time i have to pay for that kind of action.

If done right, I think it's a brilliant idea.  (Not that I think they'll do it right).

As we all know Gibson is struggling, Fender's not much better off.  People simply aren't playing instruments like they did when people were awesome and folks like Jim Hendrix were walking the Earth.

They're obviously looking to diversify the portfolio, and they think AV & automation integration is a good play. That should actually give all of you guys the warm and fuzzies about the future of the industry.

And maybe start trying to increase your revenues so you can get bought out too!  :)

I agree. Just look at all of the past "mergers" that made things (product and service) worse. It's comical when they buy one or more companies who's products overlap.

Nortek? Honeywell? LeGrande?

Being bought by a fledgling company in move that makes about as much sense as my township van ordinance.

GC has been broke for a long time- they were owned by Bain Capital and from the link, it was Bain that created the debt problem. That has caused collateral damage- they owe Fender and Gibson close to $1Billion and if GC were to default, those companies could fail.

[Link: pitchbook.com]

Gibson is a different case because Henry is an idiot. Good thing Gibson finally replaced him.

I don't know why a company would structure a deal with Bain Capital because Bain always ends up with the capital. Maybe, the company can dig out from under the debt.

Having spent some brief time at the company that was acquired, I am perplexed by this acquisition. While the company does excellent numbers and is a beast in the Lutron shade business I fail to see how this helps GC as the back-end processes of the acquired business were sorely lacking in plan, execution, and processes.

That said, kudos to anyone who can build a business in this industry and sell it! that is no small feat...

That's the whole point of the transaction, a private equity firm buys a debt free cash cow, then they put a bunch of debt on their balance sheet and use the money for another 'adventure/investment'. It's done all the time at all different transaction amounts.
BTW: Don't get the impression that I like it or anything! I hate gov. BS as much as the next person but I wish they would pass some kind of law or something to limit the amount of debt they can load on a company when they pull this, like maybe 20% or some percent so they can't put a level of debt on a company that just kills it.

Bain = Mitt Romney


That sounds like Elizabeth Warren talking!

Not for a long time, but yeah. It's great that MBAs can grind every penny out of a company, but foisting debt off so they can look like they're solvent is BS (not the college degree).