Jump to content

Bain Capital: Difference between revisions

From Wikipedia, the free encyclopedia
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
rm self link
Line 137: Line 137:
Bain led a consortium, together with [[The Carlyle Group]] and [[Thomas H. Lee Partners]] to acquire [[Dunkin' Brands]]. The private equity firms paid $2.425 billion in cash for the parent company of [[Dunkin' Donuts]] and [[Baskin-Robbins]] in December 2005.<ref>[http://www.nytimes.com/2005/12/13/business/13doughnuts.html Parent of Dunkin' Donuts Sold For $2.4 Billion to Equity Firms] (New York Times, 2005 </ref> In May 2011, Dunkin' Brands filed with the SEC to raise up to $400 million in an initial public offering.<ref>[http://www.renaissancecapital.com/ipohome/news/Dunkin-Brands-initiates-$400-million-IPO-9516.html Dunkin' Brands initiates $400 million IPO] Renaissance IPO News, May 4, 2011</ref>
Bain led a consortium, together with [[The Carlyle Group]] and [[Thomas H. Lee Partners]] to acquire [[Dunkin' Brands]]. The private equity firms paid $2.425 billion in cash for the parent company of [[Dunkin' Donuts]] and [[Baskin-Robbins]] in December 2005.<ref>[http://www.nytimes.com/2005/12/13/business/13doughnuts.html Parent of Dunkin' Donuts Sold For $2.4 Billion to Equity Firms] (New York Times, 2005 </ref> In May 2011, Dunkin' Brands filed with the SEC to raise up to $400 million in an initial public offering.<ref>[http://www.renaissancecapital.com/ipohome/news/Dunkin-Brands-initiates-$400-million-IPO-9516.html Dunkin' Brands initiates $400 million IPO] Renaissance IPO News, May 4, 2011</ref>


In 2006, Bain Capital and [[Kohlberg Kravis Roberts]], together with [[Merrill Lynch]] and the Frist family (which had founded the company) completed a $31.6 billion acquisition of [[Hospital Corporation of America]], 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of [[RJR Nabisco]]. It would later be surpassed by the buyouts of [[Equity Office Properties]] and [[TXU]].<ref>Sorkin, Andrew Ross. "[http://www.nytimes.com/2006/07/25/business/25buyout.html HCA Buyout Highlights Era of Going Private]." New York Times, July 25, 2006</ref>
In 2006, Bain Capital and [[Kohlberg Kravis Roberts]], together with [[Merrill Lynch]] and the Frist family (which had founded the company) completed a $31.6 billion acquisition of [[Hospital Corporation of America]], 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of [[RJR Nabisco]]. It would later be surpassed by the buyouts of [[Equity Office Properties]] and [[TXU]].<ref>Sorkin, Andrew Ross. "[http://www.nytimes.com/2006/07/25/business/25buyout.html HCA Buyout Highlights Era of Going Private]." New York Times, July 25, 2006</ref> In August 2006, Bain was part of the [[club deal|consortium]], together with [[Kohlberg Kravis Roberts]], [[Silver Lake Partners]] and [[AlpInvest Partners]], that acquired a controlling 80.1% share of semiconductors unit of [[Philips]] for €6.4 billion. The new company, based in the Netherlands, was renamed [[NXP Semiconductors]].<ref>{{cite news|url=http://www.nytimes.com/2006/08/04/business/worldbusiness/04chip.html |title=Technology; Royal Philips Sells Unit for $4.4 Billion|publisher=New York Times|author=Bloomberg News|date=2006-08-04|accessdate=2008-04-27}}</ref><ref>[http://www.forbes.com/technology/2006/08/02/philips-kkr-semiconductors-cx_po_0802philips.html KKR in deal to buy Philips Semiconductors]. Forbes, August 2, 2006</ref>


During the buyout boom, Bain was active in the acquisition of various retail businesses.<ref>[http://www.forbes.com/2007/06/27/guitar-center-update-markets-equity-cx_er_0627markets27.html Bain Adds Guitar Center To Its Lineup]. Forbes, June 27, 2007</ref> In January 2006, Bain announced the acquisition of [[Burlington Coat Factory]], a discount retailer operating 367 department stores in 42 states, in a $2 billion buyout transaction.<ref>[http://www.thestreet.com/story/10262389/1/bain-to-buy-burlington-coat-factory.html Bain to Buy Burlington Coat Factory]. The Street.com, January 18, 2006</ref> Six months later, in October 2006, Bain and [[The Blackstone Group]] acquired [[Michaels Stores]], the largest arts and crafts retailer in North America in a $6.0 billion leveraged buyout. Bain and Blackstone narrowly beat out [[Kohlberg Kravis Roberts]] and [[TPG Capital]] in an auction for the company.<ref>[http://www.nytimes.com/2006/07/01/business/01deal.html Consortium Buys Michaels for $6 Billion]. New York Times, July 1, 2006</ref> In June 2007, Bain agreed to acquire [[HD Supply]], the wholesale construction supply business of [[Home Depot]] for $10.3 billion.<ref>{{cite news| url=http://online.wsj.com/article/SB118226545165740543.html?mod=home_whats_news_us | work=The Wall Street Journal | title=Home Depot Boosts Buyback, Sets Unit Sale | date=June 20, 2007 | first1=Ann | last1=Zimmerman | first2=Dennis K. | last2=Berman}}</ref> Bain, along with partners [[Carlyle Group]] and [[Clayton, Dubilier & Rice]], would later negotiate a lower price ($8.5 billion) when the initial stages of the [[subprime mortgage crisis]] caused lenders to seek to renegotiate the terms of the acquisition financing.<ref>[http://www.businessweek.com/magazine/content/07_38/b4050001.htm Private Equity's White-Knuckle Deal]. Business Week, September 17, 2007</ref> Just days after the announcement of the HD Supply deal, on June 27, Bain announced the acquisition of [[Guitar Center]], the leading musical equipment retailer in the U.S. Bain paid $1.9 billion, plus $200 million in assumed debt, representing a 26% premium to the stock's closing price prior to the announcement.<ref>{{cite |url=http://www.thestreet.com/newsanalysis/retail/10365064.html |title=Bain Plucks Up Guitar Center |publisher=The Street |date=June 27, 2007}}</ref> Bain also acquired [[Edcon Limited]], which operates Edgars Department Stores in South Africa and Zimbabwe and South Africa for 25 billion-rand ($3.5 billion) in February 2007.<ref>[http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaKM8qOpFiiU Bain Capital Agrees to Buy Edgars for 25 Billion Rand]. Bloomberg, February 8, 2007]</ref>
Bain, together with [[The Blackstone Group]], acquired [[Michaels Stores]], the largest arts and crafts retailer in North America in a $6.0 billion leveraged buyout in October 2006. Bain and Blackstone narrowly beat out [[Kohlberg Kravis Roberts]] and [[TPG Capital]] in an auction for the company.<ref>[http://www.nytimes.com/2006/07/01/business/01deal.html Consortium Buys Michaels for $6 Billion]. New York Times, July 1, 2006</ref>


Other investments during the buyout boom included: [[Bavaria Yachtbau]], acquired for €1.3 billion in July 2007<ref>[http://www.sail-world.com/cruisingaus/index.cfm?nid=35266&rid=12 Bavaria set to Boom with Bain]. Sail World, July 1, 2007</ref> as well as Sensata Technologies, acquired from [[Texas Instruments]] in 2006 for approximately $3 billion.<ref>[http://www.efinancialnews.com/story/2010-03-12/bain-sensata-ipo-pipeline Bain cheers return on Sensata float]. Financial News, March 12, 2010</ref>
In August 2006, Bain was part of the [[club deal|consortium]], together with [[Kohlberg Kravis Roberts]], [[Silver Lake Partners]] and [[AlpInvest Partners]], that acquired a controlling 80.1% share of semiconductors unit of [[Philips]] for €6.4 billion. The new company, based in the Netherlands, was renamed [[NXP Semiconductors]].<ref>{{cite news|url=http://www.nytimes.com/2006/08/04/business/worldbusiness/04chip.html |title=Technology; Royal Philips Sells Unit for $4.4 Billion|publisher=New York Times|author=Bloomberg News|date=2006-08-04|accessdate=2008-04-27}}</ref><ref>[http://www.forbes.com/technology/2006/08/02/philips-kkr-semiconductors-cx_po_0802philips.html KKR in deal to buy Philips Semiconductors]. Forbes, August 2, 2006</ref>

Other investments during the buyout boom include:

* 2007, Jun &ndash; Signs an agreement with [[Guitar Center]] to purchase the music retailer for $1.9 billion, plus $200 million in debt. The buyout will be for $63 per share, a 26% premium on June 26's closing price. The deal was approved by shareholders on September 18, 2007 and closed October 9, 2007.<ref>{{cite |url=http://www.thestreet.com/newsanalysis/retail/10365064.html |title=Bain Plucks Up Guitar Center |publisher=The Street |date=June 27, 2007}}</ref>
* 2007, Jun &ndash; Agrees to acquire [[HD Supply]] for $10.3 billion, along with [[Carlyle Group]] and [[Clayton, Dubilier & Rice]] (with each agreeing to buy a one-third stake in the division). [[Home Depot]] sold their wholesale construction supply business to fund a stock repurchase estimated at $40 billion.<ref>{{cite news| url=http://online.wsj.com/article/SB118226545165740543.html?mod=home_whats_news_us | work=The Wall Street Journal | title=Home Depot Boosts Buyback, Sets Unit Sale | date=June 20, 2007 | first1=Ann | last1=Zimmerman | first2=Dennis K. | last2=Berman}}</ref>
* 2007, Jun &ndash; Acquires [[Bavaria Yachtbau]] for a price rumored to be about €1.3B Euros.<ref>[http://www.sail-world.com/cruisingaus/index.cfm?nid=35266&rid=12]</ref>
* 2007, May &ndash; Acquires Edgars Department Stores ([[Edcon Limited]]) of Zimbabwe and South Africa.<ref>[http://www.businessday.co.za/articles/article.aspx?ID=BD4A454607 Business Day, 'Retail giant Edgars starts a new chapter']</ref>
* 2006, Apr &ndash; Acquires [[Burlington Coat Factory]] Warehouse Corp., which operates more than 360 retail stores.


===Since 2008===
===Since 2008===

Revision as of 05:30, 10 January 2012

This article is about the investment firm. For the management consulting company, see Bain & Company.
Bain Capital
Company typePrivate
IndustryFinancial services, Investment management
Founded1984
FounderMitt Romney, T. Coleman Andrews III, Eric Kriss
HeadquartersBoston, Massachusetts, U.S. with offices in Chicago, New York, London, Palo Alto, Luxembourg, Tokyo, Hong Kong, Shanghai and Mumbai
Key people
Joshua Bekenstein, John Connaughton, Paul Edgerley, Mark Nunnelly, Stephen Pagliuca
ProductsPrivate equity, Venture capital, public equity, high-yield assets and Mezzanine capital
Total assetsIncrease US$66 billion (2012)
Number of employees
400+ (2012)[1]
Websitewww.baincapital.com
Bain Capital's Headquarters at 111 Huntington Avenue in Boston, Massachusetts

Bain Capital is a Boston-based alternative asset management and financial services company that specializes in private equity, venture capital, credit and public market investments. Bain invests across a broad range of industry sectors and geographic regions. As of the beginning of 2012, the firm manages approximately $66 billion of investor capital across its various investment platforms.

The firm was founded in 1984 by partners from the consulting firm Bain & Company. Since inception has invested in or acquired hundreds of companies including such notable companies as AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel.

As of the end of 2011, Bain Capital had approximately 400 professionals, most with previous experience in consulting, operations or finance.[1] Bain is headquartered at 111 Huntington Avenue in Boston, Massachusetts with additional offices in New York City, Chicago, Palo Alto, London, Luxembourg, Munich, Mumbai, Hong Kong, Shanghai and Tokyo.

Businesses and affiliates

Bain Capital's family of funds includes private equity, venture capital, public equity and leveraged debt assets.

Bain Capital Private Equity

Bain Capital Private Equity has raised ten funds and invested in more than 250 companies. The private equity activity includes leveraged buyouts and growth capital in a wide variety of industries.[2] Bain began investing in Europe in 1989 through its London-based affiliate Bain Capital Europe.[3] Bain also operates international affiliates Bain Capital Asia and Bain Capital India.

Bain Capital Private Equity is made up of more than 250 investment professionals, including 38 managing directors operating from offices in Boston, Hong Kong, London, Mumbai, Munich, New York, Shanghai, and Tokyo, as of the beginning of 2011.

Historically, Bain has primarily relied on private equity funds, pools of committed capital from pension funds, insurance companies, endowments, fund of funds, high net worth individuals, sovereign wealth funds and other institutional investors. Bain's own investment professionals are the largest single investor in each of its funds. From 1993, when Bain raised its first institutional fund through the beginning of 2012, Bain had completed fundraising for 11 funds with total investor commitments of over $38 billion, including its global private equity funds and separate funds focusing specifically on investments in Europe and Asia. Since 1998, each of Bain's global funds has invested alongside a coinvestment fund that invests only in certain larger transactions. The following is a summary of Bain's private equity funds raised from its inception through the beginning of 2012:[4]

Fund Vintage
Year		 Committed
Capital ($m)
Bain Capital Fund IV 1993 $300
Bain Capital Fund V 1995 $500
Bain Capital Fund VI 1998 $1,400[5]
Bain Capital Fund VII 2000 $3,117[5]
Bain Capital Fund VIII 2004 $4,250[5]
Bain Capital Fund VIII-E (Europe) 2004 $1,015
Bain Capital Fund IX 2006 $10,000[5]
Bain Capital Europe III 2008 € 3,500
Bain Capital Asia 2008 $1,000
Bain Capital Fund X 2008 $11,800[5]
Bain Capital Asia II 2011 $2,000

Affiliated businesses

  • Brookside Capital is the public equity affiliate of Bain Capital. Established in October 1996, Brookside's primary objective is to invest in securities of publicly traded companies that offer opportunities to realize substantial long-term capital appreciation. Brookside employs a long/short equity strategy to reduce market risk in the portfolio[6]
  • Bain Capital Ventures is the venture capital arm of Bain Capital, focused on seed through late-stage growth equity, investing in business services, consumer, healthcare, internet & mobile, and software companies. Bain Capital Ventures has raised approximately $1.53 billion of investor capital since 2001 across four investment funds. The firm's 30 investment professionals are currently investing its fourth fund, Bain Capital Venture Fund 2009, which raised $525 million from investors.[8]
  • Absolute Return Capital (ARC) is the absolute return affiliate of Bain Capital managing approximately $1.2 billion of capital. Approximately one-third of the capital managed by ARC represents commitments from Bain investment professionals. Established in May 2004, ARC invests across fixed income, equity and commidity markets to produce attractive risk-adjusted returns while maintaining low correlation to traditional investments.[9]

History

Founding and early history

Bain Capital was founded in 1984 by Bain & Company partners Mitt Romney, T. Coleman Andrews III, and Eric Kriss. In 1983, Bill Bain offered Romney the chance to head a new venture that would invest in companies and apply Bain's consulting techniques to improve operations.[10] In the face of skepticism from potential investors, Romney and his partners spent a year raising the $37 million in funds needed to start the new operation, which had fewer than ten employees.[11][12][13][14] In addition to the three founding partners, the early team included Fraser Bullock, Robert F. White, Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert.[15]

While Bain Capital was founded by Bain executives, the firm was not a an affiliate or a division of Bain & Company but rather a completely separate company. Initially, the two firms shared the same offices and a similar approach to improving business operations. Howver, the two firms had put in place certain protections to avoid sharing information between the two companies and the Bain & Company executives had the ability to veto investments that posed potential conflicts of interest.[16] Bain Capital also provided an investment opportunity for partners of Bain & Company. Bain Capital's original $37 million fund was raised entirely from private individuals in mid-1984.[15] Romney led the business during the periods 1984 to 1990 and 1992 to 1999.[17]

Bain Capital was an initial investor in Staples, Inc.

The Bain Capital team was initially reluctant to invest its capital. The partners saw weak spots in so many potential deals that by 1986, very few had been done.[18] At first, Bain Capital focused on venture capital opportunities.[18] One of Bain's earliest and most notable venture investments was in Staples, Inc., the office supply retailer. The funding enabled Staples to expand from one store in 1986 to over 2000 stores in 2011. In 1986, Bain provided $4.5 million to two supermarket executives, Leo Kahn and Thomas G. Stemberg, to open an office supply supermarket in Brighton, Massachusetts.[19] The fast-growing retail chain went public in 1989[20] and after acquiring Office Depot in 1996 the company had grown to over 1,100 stores.[21] Bain Capital eventually reaped a nearly sevenfold return on its investment, and Romney sat on the Staples board of directors for over a decade.[18][13][14] Bain invested the $37 million of capital in its first fund in twenty companies and by 1989 was generating an annualized return in excess of 50%. By the end of the decade, Bain's second fund, raised in 1987 had deployed $106 million into 13 investments.[22]

1990s

Beginning in 1989, the firm, which began as a venture capital source investing in start-up companies, adjusted its strategy to focus on leveraged buyouts and growth capital investments in more mature companies.[23] By the end of 1990, Bain had raised $175 million of capital and and financed 35 companies with combined revenues of $3.5 billion.[24]

In July 1992, Bain acquired Ampad (originally American Pad & Paper) from Mead Corporation, which had acquired the company in 1986. Mead which had been experiencing difficulties integrating Ampad's products into its existing product lines, generated a cash gain of $56 million on the sale.[25] Under Bain's ownership, the company enjoyed a significant growth in sales from $106.7 million in 1992 to $583.9 million in 1996, when the company was listed on the New York Stock Exchange. Under Bain's ownership, the company also made a number of acquisitions, including writing products company SCM in July 1994, brand names from the American Trading and Production Corporation in August 1995, WR Acquisition and the Williamhouse-Regency Division of Delaware, Inc. in October, 1995, Niagara Envelope Company, Inc. in 1996, and Shade/Allied, Inc. in February 1997.[26] Ampad's revenue began to decline in 1997 and the company laid off employees and closed production facilities to maintain profitability. However, the company filed for bankruptcy in 2001 and the assets were acquired in 2003 by Crescent Investments. Bain's ownership of Ampad, is estimated to have generated more than $100 million in profit for Bain.[27]

In 1991, Mitt Romney temporarily left Bain Capital in to rejoin and lead Bain & Co. as interim CEO. Bringing along two executives from Bain Capital, Romney began a traveling campaign to rally employees at all Bain offices globally. Romney also negotiated a complex settlement between the Bain partnership and the firm's lenders, including a $10 million reduction in the $38 million Bain owed the Bank of New England.[28][29] Although in the role for just one year before returning to Bain Capital, Romney’s work had three profound impacts on the firm. First, ownership was officially shifted from the owners to the firm’s 70 general partners. Second, transparency in the firm’s finances increased dramatically (e.g. partners were able to know each other’s salaries). Third, Bill Bain relinquished ownership in the firm that carried his name. Within a year, Bain & Company bounced back to profitability without major partner defections and the groundwork was laid for a period of steady growth.[28]

In 1994, Bain acquired Totes, a producer of umbrellas and overshoes.[30] Three years later, Totes, under Bain’s ownership, acquired Isotoner, a producer of leather gloves.[31]

Bain, together with Thomas H. Lee Partners, acquired Experian, the consumer credit reporting business of TRW, in 1996 for more than $1 billion. Formerly known as TRW's Information Systems and Services unit, Experian is one of the leading providers of credit reports on consumers and businesses in the US.[32] The company was sold to Great Universal Stores for $1.7 billion just months after being acquired.[33]

Other notable Bain investments of the late 1990s included Sealy Corporation, the manufacturer of mattresses[34]; Alliance Laundry Systems[35]; Domino's Pizza[36] and Artisan Entertainment[37].

Early 2000s

In 2002, Bain acquired Burger King together with TPG Capital and Goldman Sachs Capital Partners

Bain Capital began the new decade by closing on its seventh fund, Bain Capital Fund VIII with over $3.1 billion of investor commitments. The firm's most notable investments in 2000 included the $700 million acquisition of Datek, the online stock brokerage firm,[38] as well as the $305 million acquisition of KB Toys from Consolidated Stores.[39] Datek was ultimately merged with Ameritrade in 2002. KB Toys, which had been financially troubled since the 1990s as a result of increased pressure from national discount chains such as Wal-Mart and Target, filed for Chapter 11 bankruptcy protection in January 2004. Bain had been able to recover value on its investment through a dividend recapitalization in 2003.[40] In early 2001, Bain purchasd a 30% stake in Huntsman Corporation, a leading chemical company.[41] Bain's $600 million investment in Huntsman has been noted as an interesting footnote in the 2012 Republican Presidential nomination process since Mitt Romney's former firm (he had left Bain in 1999) acquired the company controlled by the father of another candidate Jon Huntsman (Huntsman was an executive of the company at that time).[42]

With a significant amount of dry powder in its new fund, Bain was one of a handful of private equity investors capable of completing large transactions in the adverse conditions of the early 2000s recession. In July 2002, Bain together with TPG Capital and Goldman Sachs Capital Partners, announced the high profile $2.3 billion leveraged buyout of Burger King from Diageo.[43] However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, Bain and its co-investors agreed on a reduced $1.5 billion purchase price for the investment.[44] The Bain consortium had support from Burger King's franchisees, who controlled approximately 92% of Burger King restaurants at the time of the transaction. Under its new owners, Burger King underwent a major brand overhaul including the use of The Burger King character in advertising. In February 2006, Burger King announced plans for an initial public offering.[45]

In late 2002, Bain remained active acquiring Houghton Mifflin Company for $1.28 billion, together with Thomas H. Lee Partners and The Blackstone Group. Houghton Mifflin and Burger King represented two of the first large club deals, completed since the collapse of the Dot-com bubble.[46]

In November 2003, Bain completed an investment in Warner Music Group. In 2004 Bain acquired the Dollarama chain of dollar stores, based in Montreal, Quebec, Canada and operating stores in the provinces of Eastern Canada for $1.05 billion CAD. In March 2004, Bain acquired Brenntag Group from Deutsche Bahn AG (Exited in 2006; sold to BC Partners for $4B). In August 2003, Bain acquired a 50% interest in Bombardier Inc.'s recreational products division, along with the Bombardier family and the Caisse de dépôt et placement du Québec, and created Bombardier Recreational Products or BRP.

Bain and the 2000s Buyout Boom

Bain led a consortium in the buyout of Toys "R" Us in 2004

In 2004 a consortium comprising KKR, Bain Capital and real estate development company Vornado Realty Trust announced the $6.6 billion acquisition of Toys "R" Us, the toy retailer. A month earlier, Cerberus Capital Management, made a $5.5 billion offer for both the toy and baby supplies businesses.[47] The Toys 'R' Us buyout was one of the largest in several years.[48] Following this transaction, by the end of 2004 and in 2005, major buyouts were once again becoming common and market observers were stunned by the leverage levels and financing terms obtained by financial sponsors in their buyouts.[49]

The following year, in 2005, Bain was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. Bain's partners in the acquisition were Silver Lake Partners, TPG Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and The Blackstone Group. This represented the largest leveraged buyout completed since the takeover of RJR Nabisco at the end of the 1980s leveraged buyout boom. Also, at the time of its announcement, SunGard would be the largest buyout of a technology company in history, a distinction it would cede to the buyout of Freescale Semiconductor. The SunGard transaction is also notable in the number of firms involved in the transaction, the largest club deal completed to that point. The involvement of seven firms in the consortium was criticized by investors in private equity who considered cross-holdings among firms to be generally unattractive.[50][51]

Bain led the buyout of Dunkin' Brands for $2.4 billion in 2005

Bain led a consortium, together with The Carlyle Group and Thomas H. Lee Partners to acquire Dunkin' Brands. The private equity firms paid $2.425 billion in cash for the parent company of Dunkin' Donuts and Baskin-Robbins in December 2005.[52] In May 2011, Dunkin' Brands filed with the SEC to raise up to $400 million in an initial public offering.[53]

In 2006, Bain Capital and Kohlberg Kravis Roberts, together with Merrill Lynch and the Frist family (which had founded the company) completed a $31.6 billion acquisition of Hospital Corporation of America, 17 years after it was taken private for the first time in a management buyout. At the time of its announcement, the HCA buyout would be the first of several to set new records for the largest buyout, eclipsing the 1989 buyout of RJR Nabisco. It would later be surpassed by the buyouts of Equity Office Properties and TXU.[54] In August 2006, Bain was part of the consortium, together with Kohlberg Kravis Roberts, Silver Lake Partners and AlpInvest Partners, that acquired a controlling 80.1% share of semiconductors unit of Philips for €6.4 billion. The new company, based in the Netherlands, was renamed NXP Semiconductors.[55][56]

During the buyout boom, Bain was active in the acquisition of various retail businesses.[57] In January 2006, Bain announced the acquisition of Burlington Coat Factory, a discount retailer operating 367 department stores in 42 states, in a $2 billion buyout transaction.[58] Six months later, in October 2006, Bain and The Blackstone Group acquired Michaels Stores, the largest arts and crafts retailer in North America in a $6.0 billion leveraged buyout. Bain and Blackstone narrowly beat out Kohlberg Kravis Roberts and TPG Capital in an auction for the company.[59] In June 2007, Bain agreed to acquire HD Supply, the wholesale construction supply business of Home Depot for $10.3 billion.[60] Bain, along with partners Carlyle Group and Clayton, Dubilier & Rice, would later negotiate a lower price ($8.5 billion) when the initial stages of the subprime mortgage crisis caused lenders to seek to renegotiate the terms of the acquisition financing.[61] Just days after the announcement of the HD Supply deal, on June 27, Bain announced the acquisition of Guitar Center, the leading musical equipment retailer in the U.S. Bain paid $1.9 billion, plus $200 million in assumed debt, representing a 26% premium to the stock's closing price prior to the announcement.[62] Bain also acquired Edcon Limited, which operates Edgars Department Stores in South Africa and Zimbabwe and South Africa for 25 billion-rand ($3.5 billion) in February 2007.[63]

Other investments during the buyout boom included: Bavaria Yachtbau, acquired for €1.3 billion in July 2007[64] as well as Sensata Technologies, acquired from Texas Instruments in 2006 for approximately $3 billion.[65]

Since 2008

Since the closure of the credit markets in 2007 and 2008, Bain has managed to close only a small number of sizable transactions. In July 2008, Bain, together with NBC Universal and The Blackstone Group agreed to purchase The Weather Channel from Landmark Communications.[66][67]

Other recent investments include:

In his 2010 book The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may "starve" a company of capital,[71] was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their "hard assets", in determining how much money was available to pay dividends.[72] In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.[17]

References

  1. ^ a b "Team", Bain Capital (website), retrieved January 4, 2012
  2. ^ Bain Capital Private Equity (company website)
  3. ^ Bain Capital Europe (company website)
  4. ^ Data collected from Preqin, a private equity database system
  5. ^ a b c d e Includes coinvestment funds for Bain Capital Fund VI ($300m), Bain Capital Fund VII ($617m), Bain Capital Fund VIII ($750m), Bain Capital Fund IX ($2 billion) and Bain Capital Fund X ($1.8 billion), each raised alongside the main funds
  6. ^ Brookside Capital (company website)
  7. ^ Sankaty Advisors (company website)
  8. ^ Bain Capital Ventures (company website)
  9. ^ Absolute Return Capital (company website)
  10. ^ Pappu, Sridhar (September 2005). "The Holy Cow! Candidate". The Atlantic Monthly.
  11. ^ Rees, Matthew (December 1, 2006). "Mister PowerPoint Goes to Washington". The American.
  12. ^ Kirkpatrick, David D. (June 4, 2007). "Romney's Fortunes Tied to Business Riches". The New York Times.
  13. ^ a b Blum, Justin; Lerer, Lisa (July 20, 2011). "Romney's Record Defies Image as Job-Creator". Bloomberg News.
  14. ^ a b Wallace-Wells, Benjamin (October 23, 2011). "Mitt Romney and the 1% Economy". New York.
  15. ^ a b Bain & Company Profile. Funding Universe, 2000
  16. ^ Big Consultants Woo Employees by Offering a Piece of the Action. New York Times, October 22, 1999
  17. ^ a b Yang, Jia Lynn (December 14, 2011), "Mitt Romney's Bain Capital tenure shows mixed record on bankruptcies", Washington Post
  18. ^ a b c Gavin, Robert; Pfeiffer, Sacha (June 26, 2007). "The Making of Mitt Romney: Part 3: Reaping profit in study, sweat". The Boston Globe.
  19. ^ "Growth in Office-Supply 'Supermarkets' Threatens Tough War for Market Share". Wall Street Journal, December 1, 1988
  20. ^ Staples Inc. Plans to Go Public. The Boston Globe, March 22, 1989
  21. ^ Staples Inc. Company Profile. Funding Universe, 2002
  22. ^ Counselor To The King. New York Times, September 24, 1989
  23. ^ "Venture-Capital Funds Grow Larger and Larger - But Start-Up Companies Find They're Still Left Out in the Cold". The Wall Street Journal, September 7, 1989
  24. ^ Bain Names Chief Executive And Begins a Reorganization. New York Times, January 30, 1991
  25. ^ Mead Corp. to Lay Off 1,000. New York Times, July 3, 1992
  26. ^ American Pad & Paper Company Profile
  27. ^ James Abundis and Robert Gavin, "Ampad: A controversial deal" (PDF), The Boston Globe, retrieved January 4, 2012
  28. ^ a b Bain Names Chief Executive And Begins a Reorganization. New York Times, January 30, 1991
  29. ^ Schoenberg, Shira (15 July 2011). "Romney accused of getting a 'bailout'". Boston Globe. Retrieved 5 January 2012.
  30. ^ Totes is Bought By Boston Investment Firm. New York Times, June 28, 1994
  31. ^ Totes To Buy A Majority Interest In Aris Isotoner. New York Times, June 6, 1997
  32. ^ TRW Credit Reporting Unit To Be Sold for $1 Billion. Bloomberg Business News, February 10, 1996
  33. ^ Large British Retailer to Buy U.S. Credit-Data Company. New York Times, November 15, 1996
  34. ^ Sealy to be Sold to Management and an Investor Group. New York Times, November 4, 1997
  35. ^ Raytheon in $358 million Deal to Sell Laundry Business. New York Times, February 24, 1998
  36. ^ Domino's Pizza Founder To Retire And Sell A Stake. New York Times, September 26, 1998
  37. ^ Playing Movies Like a Growth Stock. New York Times, December 21, 1998
  38. ^ Group to Buy Controlling Interest in Datek Online for $700 Million. New York Times, December 02, 2000
  39. ^ Bain Capital Buys Toys Unit of Consolidated Stores. New York Times, December 09, 2000
  40. ^ Buyout Profits Keep Flowing to Romney. New York Times, December 18, 2011
  41. ^ Bain Capital Buys Stake In Huntsman, Chemical Company. New York Times, February 24, 2001
  42. ^ Huntsman, Bain Capital dealing: Huntsman offering $600 million equity stake to venture firm. Deseret News, Feb. 24, 2001
  43. ^ U.S. Investors Agree to Buy Burger King From Diageo for $2.26 Billion. New York Times, July 26, 2002
  44. ^ A Lower Price Is Said to Revive Burger King Sale, New York Times, December 12, 2002
  45. ^ Grace Wong (2006-05-12). "Burger King IPO set to fire up". CNN Money. Retrieved 2007-09-30.
  46. ^ Vivendi Finishes Sale of Houghton Mifflin To Investors. New York Times, January 1, 2003
  47. ^ Sorkin, Andrew Ross and Rozhon, Tracie. "Three Firms Are Said to Buy Toys 'R' Us for $6 Billion." New York Times, March 17, 2005
  48. ^ What's Next for Toys 'R' Us?. Wall Street Journal, March 18, 2005
  49. ^ Deal Mania: Shades of the '80s: The leveraged buyout is back in vogue. US News & World Report, April 10, 2005
  50. ^ "Capital Firms Agree to Buy SunGard Data in Cash Deal." Bloomberg L.P., March 29, 2005
  51. ^ Do Too Many Cooks Spoil the Takeover Deal?. New York Times, April 3, 2005
  52. ^ Parent of Dunkin' Donuts Sold For $2.4 Billion to Equity Firms (New York Times, 2005
  53. ^ Dunkin' Brands initiates $400 million IPO Renaissance IPO News, May 4, 2011
  54. ^ Sorkin, Andrew Ross. "HCA Buyout Highlights Era of Going Private." New York Times, July 25, 2006
  55. ^ Bloomberg News (2006-08-04). "Technology; Royal Philips Sells Unit for $4.4 Billion". New York Times. Retrieved 2008-04-27.
  56. ^ KKR in deal to buy Philips Semiconductors. Forbes, August 2, 2006
  57. ^ Bain Adds Guitar Center To Its Lineup. Forbes, June 27, 2007
  58. ^ Bain to Buy Burlington Coat Factory. The Street.com, January 18, 2006
  59. ^ Consortium Buys Michaels for $6 Billion. New York Times, July 1, 2006
  60. ^ Zimmerman, Ann; Berman, Dennis K. (June 20, 2007). "Home Depot Boosts Buyback, Sets Unit Sale". The Wall Street Journal.
  61. ^ Private Equity's White-Knuckle Deal. Business Week, September 17, 2007
  62. ^ Bain Plucks Up Guitar Center, The Street, June 27, 2007
  63. ^ Bain Capital Agrees to Buy Edgars for 25 Billion Rand. Bloomberg, February 8, 2007]
  64. ^ Bavaria set to Boom with Bain. Sail World, July 1, 2007
  65. ^ Bain cheers return on Sensata float. Financial News, March 12, 2010
  66. ^ Robert Marich. "The Weather Channel Sale Wraps". Broadcasting & Cable. Retrieved 2008-09-26. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  67. ^ Michael J. de la Merced (July 7, 2008). "Weather Channel Is Sold to NBC and Equity Firms". New York Times. Retrieved 2008-09-17. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  68. ^ Reuters http://today.reuters.com/news/articlenews.aspx?type=newsOne&storyID=2006-11-16T130113Z_01_N16247497_RTRUKOC_0_US-MEDIA-CLEARCHANNEL.xml. {{cite news}}: Missing or empty |title= (help)
  69. ^ Dagher, Veronica; Holmes, Elizabeth (October 12, 2010). "Bain Pays .8 Billion for Gymboree". The Wall Street Journal.
  70. ^ Bain Capital pays $1.6 billion for Dow division, Mass High Tech, March 2, 2010
  71. ^ Kosman, Josh (2010), The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, p. 106, ISBN 1591843693
  72. ^ Kosman, Josh (2010), The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, p. 118, ISBN 1591843693

See also

Retrieved from "https://en.wikipedia.org/w/index.php?title=Bain_Capital&oldid=470565976"