Private equity has been active in manufacturing for years | Local company

Private equity has been active in manufacturing for years, but has become more visible as more companies have entered the arena.

Nationally, private equity firms have grown from 28 in 1980. The Washington Post reported on July 6 that there are now 9,200 firms managing nearly $7 trillion. The Post article says that the popularity of private equity is fueled by its rate of return – 14.3% per year over the past 25 years to 2021. That’s 4.4 percentage points per year of better than the US stock market. The post article warns that as a bear market hits its seventh month, private equity could lose its luster.

Private equity firms are essentially pools of investors who buy and operate businesses, parts of businesses, or other assets. They are not public, so there are no shares that are bought and sold on a stock market, and none of the extensive public reporting requirements that come with being a public company.

In recent years, more Lancaster County businesses have announced outright financing or buyouts by private equity firms.

AHF Products, the buyer of bankrupt Armstrong Flooring, was acquired in February by Paceline Equity. The deal gave AHF more money to grow, its CEO said at the time. AHF Products was no stranger to private equity funding: In 2018, Armstrong Flooring sold its wood flooring business, AHF Products, to private equity firm American Industrial Partners for $100 million.

Private equity has hit a variety of businesses in Lancaster County, ranging from the recent transaction of WindRose Health Investors LLC, which bought Apothecary of Ganséto the 2019 agreement in which Turkey Hill Dairy has been sold to a subsidiary of Peak Rock Capital, a middle-market private equity firm, of publicly traded Kroger.

Other private equity deals in recent years include Swing Kingdom and Atlas Moulding, Tait, Lancaster Fine Foods and Neffsville Plumbing, Heating & Cooling.

In the 40 years since manufacturing employment peaked, the industry has struggled to regain the prominence it once had

Armstrong Flooring retirees remember company once known for secure jobs and retirement

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