Fire department budgets have a private equity problem

Private equity money has flowed into so many parts of this economy — skilled trades like plumbing, restaurant chains, even youth sports. And now, companies backed by private equity are making acquisitions in software used by fire departments, according to New York Times investigative correspondent Mike Baker.

In Norfolk, Connecticut, the volunteer fire department has a budget of $132,000 a year, Baker said. They were paying $795 a year for their software until it was bought up by a private equity-backed company, which planned to shut it down and offered another software for $5,000.

“They go looking around for an alternative,” Baker said. “And then that same company backed by private equity comes along and buys up that second software provider. They really feel kind of trapped and have eventually now found a solution that wasn’t up to $5,000 a year but was still a lot more than they were paying before.”

Baker spoke with “Marketplace” host Kai Ryssdal about his reporting. Use the audio player above to hear their conversation.