Jchn CepIa

Huge part of the PE playbook. I've seen it countless times. I remember speaking w a partner at a large fund who did an incredible deal in the mfg space. Rolled up a bunch of speciality mfgs w/ single sole source dynamics. Like the example below, doubled prices on day 1 with every acquisition. I said "I'm sure that didn't go over well with their customers..." Wrong. 80%+ of buyers took the increase w/o skipping a beat. Many commented "I always wondered why John (prior owner) never raised our prices. I've been waiting for this call for the last five years..." Moreover, if someone didn't take the increase, they were more than happy to thank them for their business and show them the door. The 80% who did take it way more than made up for those who left. Firing less profitable customers was the cherry on top for them. I say this to procurement teams all the time... If one of your suppliers gets acquired by PE and they hit you with a big price increase: a) don't be surprised, b) look at the whole picture to see if it's a reasonably legit true up to current market prices, c) don't overestimate your leverage in that moment (especially if it's a key supplier) - they may actually be firing you. Whether we like it or not as customers, the reality is this playbook works.