Small Businesses Are Pushing Back Against Private Equity

Jay Cunningham says he’s fielded hundreds of calls and emails over the years from private equity firms poking around his Atlanta-area plumbing business. He wagers he could fetch tens of millions of dollars for Superior Plumbing, freeing up time for him to see his grandkids, say, or travel more to New York. But Cunningham refuses to make a deal with a buyout firm. Going from independent to PE-owned, he says, would be bad for his employees—including several of his adult children—as well as the wider community. “I’ve resisted selling, because of the people that work for me,” Cunningham, 64, says, adding that shoppers, too, are starting to boycott PE-backed companies if they’re aware the ownership has changed. They understand “that when these firms are getting gobbled up, it’s less favorable for the customer.”

For at least a decade, private equity has been encroaching on America’s mom and pop businesses, the backbone of the US economy, scooping up independent roofing contractors, veterinary practices, health clinics and other operators at a rapid clip. Now a PE pushback is brewing among small-business owners such as Cunningham, who are increasingly refusing to take part—and making sure everybody knows it, loudly touting their antibuyout stances and locally owned credentials.