While Most LBOs Are Predicated on Improving Operating Performance Through

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.