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Private Equity Firms Are Piling On Debt to Pay Dividends
Dividend recaps, a kind of borrowing long condemned for loading up companies with debt for the benefit of their private equity owners, has surged.
Using borrowed money, the Blackstone Group of New York got about $200 million in dividends out of a company it controls, in a transaction called a dividend recapitalization.Credit.Bloomberg
Feb. 19, 2021
The initial public offering of Apria Healthcare last week was a $170 million boon to Blackstone Group, the private equity firm that is Apria’s majority owner.
But as lucrative as that payday was, it wasn’t as good as the one Blackstone extracted from the company just a few weeks earlier: about $200 million in dividends, paid with borrowed cash.