I can't for the life of me imagine why a private-equity exec would be drooling over the prospect of "managing declining cash flow".
Why Private Equity May Dial Up AOL - BusinessWeek
I especially can't imagine why they'd get excited over managing the demise of dial-up.
Keep in mind that I'm not considering investing in AOL. I'm just surprised that Business Week was persuaded to publish this dreck.
Why Private Equity May Dial Up AOL - BusinessWeek
I especially can't imagine why they'd get excited over managing the demise of dial-up.
I wonder if Steve Case is still looking over his shoulder, reflexively dodging bullets...AOL’s access service had 3.4 million subscribers as of June 30, down 23 percent from a year earlier, according to regulatory filings. The business will generate about $1.5 billion in earnings before interest, taxes, depreciation, and amortization from 2011 to 2013, Sinha estimates. So a private equity firm could offer $1.5 billion for the access business knowing that there would be enough cash flow to pay off the cost of an acquisition within three years. “Everything after that is pure profit,” he says.
“The entirety of AOL is more compelling for private equity today, whether to take it over or buy it and split it up,” says Clayton Moran, an analyst with Benchmark, a research and investment banking firm in Boca Raton. That’s because private equity firms can create a financial model based on the dial-up unit’s “manageable declining cash-flow story,” he says.
Keep in mind that I'm not considering investing in AOL. I'm just surprised that Business Week was persuaded to publish this dreck.