While Most LBOs Are Predicated on Improving Operating Performance Through

question 51

Essay

While most LBOs are predicated on improving operating performance through a combination of aggressive
cost cutting and revenue growth, hospital chain HCA laid out an unconventional approach which relied heavily on revenue growth in its effort to take the firm private. On July 24, 2006, management again announced that it would "go private" in a deal valued at $33 billion including the assumption of $11.7 billion in existing debt. Would you consider a hospital chain a good or bad candidate for an LBO? Be specific.

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Definitions:

Imposter Syndrome

A psychological pattern where an individual doubts their accomplishments and fears being exposed as a fraud.

Supervisors

Individuals who oversee and manage the work and performance of others in an organizational setting.

Capable

Having the ability, fitness, or quality necessary to do or achieve a specified thing.

Disillusionment

A feeling of disappointment resulting from the discovery that something is not as good as one believed it to be.