>How much of this will end being a ZIRP phenomenon?
A lot, given that private equity operates on a debt driven M&A strategy. But don't expect the consolidation to slow down. They will just squeeze their businesses and customers that much harder.
> A lot, given that private equity operates on a debt driven M&A strategy. But don't expect the consolidation to slow down. They will just squeeze their businesses and customers that much harder.
This. The likely outcome is a deterioration of the companies. The deterioration will be felt by employees and customers both. This is the only way PE will be able to recoup any high interest debt they take on.
>I don't doubt that will happen but how does that translate to sustainable, as opposed to short-term, earnings?
It doesn't. The PE playbook is to find distressed businesses with solid brand power, milk them dry until there's nothing left, and then sell off or liquidate the remnants. They function more or less as garbage collection for the economy.
A lot, given that private equity operates on a debt driven M&A strategy. But don't expect the consolidation to slow down. They will just squeeze their businesses and customers that much harder.