Private equity managers coming up new gimmicks is not news, but this latest one simply doesn't seem to make a lot of sense.
After all, bulk discounting is the oldest trick in the book and one would think that big boys like Hewlett-Packard and FedEx are not that easy to prey upon in this way. So what to make of this article? http://dealbook.nytimes.com/2012/07/11/16-million-reams-of-paper-please ---------------------------------snip A single company purchased more than 50,000 Hewlett-Packard computers last year, buying in bulk to shave millions of dollars off its costs. But it was not General Electric, Procter & Gamble or another large, multinational conglomerate with the muscle to dictate prices to suppliers. Rather, the big buyer was the Blackstone Group, a private equity firm. Private equity firms like Blackstone are emerging as a powerful new force in the marketplace. The big investors, which collectively oversee thousands of companies, are using their size and scope to pressure suppliers, set their own prices and exert their influence in a range of industries, including health care, construction and consumer goods. Last year, Blackstone was part of a group of companies that collectively bought 16 million reams of copy paper, 35 million FedEx shipments and 900,000 days’ worth of rental cars from National and Avis. “We have incredible leverage,” said James A. Quella, Blackstone’s North American head of portfolio operations. “The more volume we have, the lower our prices go.” _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
