If you think a company is worth $10M but the market only values it at $5M you might buy some shares.
If a PE firm sees a struggling company that the market values at $5M, but they think with their managerial expertise, capital to invest, and patience, they can raise the valuation to $50M, they might just buy the entire company and do that.
An example is that Dell wen private in 2013. Dell was founded when computers were often sold at 40% margin in the 90s. By the end of the 2010s computer makers were in a “race to the bottom” with razor thin margins on $300 consumer PCs. If Dell kept competing that way they wouldn’t be able to please their shareholders every quarter so they took the company private. Dell was in a unique position to go private because Michael Dell wanted to do it and had billions in wealth he could use to do so. He only had to get an investment firm to put up the other 25% of the value.
Michael Dell returned as CEO and made changes to the workforce and organization. While they were private they invested in new product, moved their B2B business to channel-based rather than direct sales, and focused on servers and business computers. They also bought EMC during this period. These projects took a lot of time and cash that investors would not have been patient with. We know Dell felt that way because after completing these projects and returning profit and growth, they went public again.
> I have read somewhere that when a company is taken private it can focus on long term goals instead of quarterly earnings
If the company is privately owned, they can do whatever they want. If they want to run the company into the ground and then spin off the dried out husk, there will be no shareholder backlash.
You will see that a lot (not all) companies that go private are already profitable, and are bought as investments by private equity firms that have billions and billions of dollars to spend. Capital is not an issue.
Others have made great points, but I feel the greatest advantage is that they don’t need to jerkoff their shareholders. This is particularly valuable if the company or CEO or industry is a lightning rod for controversy. I feel apologizing to your shareholders over bullshit can be distracting. Having them constantly harrass over because they are afraid of public opinion would likely be obnoxious. You might still have to deal with randoms being upset with your company, but being private let’s you legit say “they aren’t important enough or they won’t impact our bottom line” whereas investors may disagree
You’re assuming that if there are less requirements for financial statements then there will no financial statements. That is not true.
If a PE group spends 30 bucks on a public company which they take private, they are most certainly going to maintain financial statements.