In general, the company that was bought was likely being outcompeted or soon to become outcompeted. There's a reason the PE bought it: to turn it around into something that is better than the previous owner could achieve.

You can only make money in an LBO if you meaningfully improve margins or you grow massively such that the debt portion of enterprise value becomes smaller. In both cases, the company is better off than it was before.

I do think there are limits to the value that PE can bring and there are many bottom feeders going into businesses they shouldn't, like fire trucks. But not all of PE is bad.

The better solution is to tax PE capital gains as income so they pay their fair share of taxes, making good deals harder to find, drying up some appetite for that highly saturated part of finance, and returning more value to communities when they do succeed.