PESP talks private equity and the pending Walgreens acquisition on the Oddly Specific Podcast with Meredith Lynch
July 28, 2025
Earlier this month, PESP’s Executive Director, Jim Baker, joined Meredith Lynch on the Oddly Specific podcast to shed light on the ever-expanding influence of the private equity industry. With assets under management skyrocketing to over $22 trillion, private equity firms are quietly reshaping our economy, impacting everything from jobs and housing to healthcare.
Jim detailed how private equity firms raise money from institutional investors and ultra-wealthy individuals to acquire companies. Their strategy often involves aggressively growing cash flow for their own benefit over a short period, typically by boosting sales or, more commonly, by cutting costs. The ultimate goal is to sell the company for a profit, a process that these firms deploy and repeat.
Private equity firms use very little of their own money, instead burdening the acquired company with substantial debt. Jim explained that this practice puts the purchased company at a much higher risk of bankruptcy, a consequence that doesn’t fall on the private equity firm but on the company itself. The legality of this practice, where companies like Toys R Us or potentially Staples are saddled with debt for the benefit of the acquiring firm, remains a significant concern.
A good example of this is the looming Sycamore Partners acquisition of Walgreens. Sycamore Partners, a New York-based private equity firm specializing in acquiring retailers and consumer brands, has a track record that should concern Walgreens consumers and employees. Their strategy, as reported in a 2018 Wall Street Journal article, often involves buying struggling retailers, selling off valuable assets, and then aggressively cutting costs. This can lead to bankruptcies and mass layoffs, as seen with their ownership of companies like Belk and , Nine West.
During his conversation with Meredith, Jim raised PESP’s concerns regarding a potential Sycamore Partners acquisition of Walgreens. He highlighted the risk of massive job losses, estimating that if Sycamore closes the same share of stores at Walgreens as it did at Staples, it could result in over 60,000 jobs lost.[1] This acquisition could also significantly impact access to healthcare, given that Walgreens is a leading provider of prescriptions nationwide. Sycamore’s history of store closures could force individuals in more rural communities to travel farther for essential prescriptions, or risk going without them.
Jim also pointed out that private equity enjoys the backing of the Trump administration, which has placed several private equity executives in key positions of power. The tax and policy bill, which President Trump recently signed into law, not only maintained a hugely profitable tax loophole benefiting private equity millionaires and billionaires but also offered an additional tax break for using even more debt to acquire companies.[2] This incentivizes a practice that inherently increases the risk of private equity acquiring companies with significant amounts of debt.
Despite the daunting nature of the private equity playbook, Jim closed out his conversation with Meredith by offering ways for individuals to educate themselves and express their concerns. PESP offers public resources, such as the Private Equity Employer Tracker and Private Equity Bankruptcy Tracker on our website, to help people determine if their employer or the services they use are owned by private equity. There is also growing momentum at the state level to rein in private equity. For example, states like Maryland, Illinois, California, and New York have adopted labor and housing standards for private equity investments.
Jim also urged listeners to reach out to their elected officials to voice concerns about the impact of private equity on issues such as healthcare, housing, and jobs. Finally, voting in state and local elections is critical, as these officials often make decisions that directly impact private equity regulations. Research where candidates stand on private equity-related issues and ask them directly about their relationship to the industry.
By increasing transparency and empowering communities, PESP continues its work to hold this powerful industry accountable and advocate for policies that protect people over profits.
[1] Staples, which Sycamore Partners acquired in 2017, reduced its US store count by one third from 1,255 stores in January 2017, before the Sycamore Partners buyout of the chain, to 840 stores today, a 33% reduction. Walgreens has around 220,000 US employees and 8,500 US stores, so a 33% reduction would involve closure of around 2,800 stores and layoffs of around 72,000 employees.
[2] By changing the standard for the calculation of business interest tax deduction from 30% of EBIT ot 30% of EBITDA.
