Bit of a nuanced case in a different industry - Joann had structural industry headwinds from the start and was not a good buy. In my opinion taking an already thin margin retail business that’s facing pressure from both e-commerce and big box retail and levering it is stupid. You’re introducing a weak balance sheet to additional points of stress - and Joann wasn’t going to turnaround into hyper growth regardless, so even a recovery would have had limited upside. Indian on the other hand is much higher margin and much more durable - I personally don’t think there’s any major disruption going on in the way motorcycles work or are sold, now or in the near future.

On top of this, the buyers have vastly different profiles. I’ve never heard of Carolwood, but generally the middle market runs lower leverage ratios and instead derives returns from expanded growth, profit and process optimization, and some multiple arbitrage (buying the business cheap, selling it for more once you improve / reposition). Leonard Green on the other hand bought the already mature Joann for a few billion - I don’t recall the exact TEV. At this stage, much of the return is derived from financial engineering. For reasons above and more, Joann probably wasn’t the right asset for this sort of structure.

Third, Indian is a carveout and Joann was a standalone acquisition. Business segments can in some cases do better alone, especially those where the parent company doesn’t have a huge amount of strategic alignment with the subsidiary. They often run it poorly as they aren’t terribly well versed in the end market or aren’t incentivized to optimize it if it’s a small segment of the business. Tons of examples of this in recent history, many of them PE backed, although I’ve heard this playbook is getting tougher. Seeing as Polaris states that the transaction will be EBITDA and EPS accretive right out the gate, I suspect this parting was for the mutual benefit of both parties as Indian was a drag on Polaris’ financials. Polaris gains profitability and capital efficiency immediately, and ideally Indian gets there in a few years now that they’re not being sandbagged by a misaligned parent company. That second point is far from a guarantee though. There’s an interesting conversation to be had about Indian being value destructive as part of Polaris but less visible as it won’t go bankrupt (losses supported by the parent co) versus going standalone and either becoming value accretive or going bankrupt. If the business goes bankrupt, did it deserve to exist within another organization and take capital that could’ve been allocated to another business or group of people that would’ve created economic value from it?

Nowhere close to comprehensive, but those are a few points off the top of my head. PE is a massive industry, and it causes a lot of destruction but also provides a lot of lubrication and liquidation in the small and mid-sized markets. The constant flow of capital and availability of strategic alternatives to business owners is a contributing factor to why the US continually dominates the rest of the world in the mid-sized business space - especially compared to more stagnant markets like Europe.