Blaw-Knox towers and Nashville

[Dan.Strassberg]

VCs usually buy companies to dress them up for sale and then sell them
at a profit or take them public when the selling is good. Presumably,
Sun has a timetable for Friendly's, although, if cash flow is
positive, the VCs may hold on longer than they had originally planned.
However, few, if any, VCs have unlimited patience. Positive cash flow
is not the whole story; if they can find an investment that produces a
better return on capital, they will get out of a situation that has
failed to produce the hoped-for results. While they wait for the
opportunity to unload, they have only one objective--each quarter's
bottom line--provided they don't do anything to reduce the enterprise
value. Which means, figure out how to run the business without having
the enterprise value take a hit and without having to pump in more
capital. I'd say that expanding Friendly's would be about the last
thing on Sun's mind. A sale, if it comes, is likely to be to a chain
that has no presence in New England and views Friendly's as
more-or-less compatible with their target demographics and style. Can
anyone think of such a chain?

-----
Dan Strassberg (dan.strassberg@att.net)
eFax 1-707-215-6367

----- Original Message ----- 
From: "Bob DeMattia" <bob.bosra@demattia.net>
To: "Garrett Wollman" <wollman@bimajority.org>
Cc: "Boston-Radio-Interest" <boston-radio-interest@bostonradio.org>
Sent: Thursday, March 17, 2011 10:25 PM
Subject: Re: Blaw-Knox towers and Nashville


> Friendly's is actually owned by Sun Capital Partners, a
> private-equity firm.
> SCP owns dozens of businesses in a variety of industries.  I'm
> fairly sure
> that if the Friendly's management could make a strong case, they
> could
> get capital to expand.  Likely that SCP wants them to focus on
> making
> their existing business stronger rather than spend the attention on
> new
> markets and stores.
>
> This is probably a lesson that some radio companies should learn.
>
> -Bob