Week in Review: Airplanes, Leverage and a Pop Quiz

We’ll admit it – the private equity world can get a bit repetitive. Recently we’ve been talking about healthcare and Mitt Romney over and over again. But, hidden in that repetition are lessons and little moments of magic. And news about American Airlines.

American Airlines

The possibility of an American Airlines-US Airways merger has held the media’s attention recently. Although the timing and selection of the suitor is important, there are more interesting details hidden underneath. For example, it may be that AMR – the company in Chapter 11 – is not the company most in need. A merger of this stature could undermine the industry power hierarchy that has emerged since the creation of Delta Airlines and United Continental. And worst of all, a merger of this stature may cause you to lose your frequent flier miles and airline benefits.What are business travelers going to do without our free drinks?

Health Care

Q&A with Leaders of St. Peter’s Health Mergers: Here is a nice follow-up to our article on merger integration. This interview with Steven Boyle, President and CEO of St. Peter’s Health Care System, and Dr. James K. Reed, President and CEO of Northeast Health, discusses the ongoing merger of the two companies. With four hospitals, 11,740 employees and three distinct cultures, this merger is a force to be reckoned with. Or a mess to figure out. In the interview, Boyle and Reed discuss problems they’re anticipating and how they expect to handle them. Good luck.

5 Common Questions on Bank & Mezzanine Lending for Surgery Centers: Q&A with Kurt Faulk and Rodger Davis: Looking at the healthcare industry from a different angle, this interview covers the current state of bank and mezzanine lending for ambulatory surgery centers (ASCs). Rodger Davis, managing partner of Northcreek Mezzanine Fund I, and Kurt Faulk, senior vice president at SNB Bank of Dallas, explain how they analyze and approach loans in the current economic climate. If you are seeking any loan or cap raise, this is worth a read.

Politics & Pop Quizzes

Good Leverage, Bad Leverage and Bain: Leverage is a powerful tool. It allows PE firms to buy companies at significantly reduced out of pocket expenses. But what does it mean for anyone outside the immediate PE group? The potential risks of LBOs are explored through – like most other PE debates nowadays- Mitt Romney. On one hand, it was argued that Romney “privatized the gains and socialized the losses”. On the other hand, he is a player within – not producer of – a very risky business. Is leverage an inherently dangerous tool? Or does it depend on the player?

Pop Quiz: Everything You Never Knew about Private Equity Pros: To end on a fun note, we found this pop quiz. Think you’re well connected? Think you know the industry and all the players? Over the past year and a half, The Private Equity Analyst has asked some notable PE figures “What would people be surprised to know about you?” Try your hand at the quiz and see just how well you know the ins-and-outs of the PE world.