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Clayton, Dubilier & Rice

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Clayton, Dubilier & Rice, LLC
Company typePrivate
IndustryPrivate equity
Founded1978; 46 years ago (1978)
HeadquartersSeagram Building
New York City, New York, U.S.
AUMUS$57 billion (2023)
Websitewww.cdr-inc.com

Clayton, Dubilier & Rice (CD&R)[1] is an American private equity company. It is one of the oldest private equity investment firms in the world. Founded in 1978, CD&R has managed the investment of more than $30 billion in approximately 90 businesses, representing a broad range of industries with an aggregate transaction value in excess of $140 billion. Approximately half of CD&R's investments have involved corporate divestitures.

CD&R had ownership stakes in, among others, B&M Retail, Envision Healthcare, The Hertz Corporation, Hussman International, Rexel (a distributor of electrical parts and equipment) and US Foods (a broadline foodservice distributor), Sally Beauty, Diversey, Inc., VWR International, Brake Bros, Kinko's (now FedEx Office, previously FedEx Kinko's), Uniroyal Goodrich Tire Company and Lexmark.

In June 2023, Clayton, Dubilier & Rice were ranked 17th in Private Equity International's PEI 300 ranking of the largest private equity firms in the world.[2]

History

History of private equity
and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)
The 2010s
(expansion)
The 2020s
(COVID-19 recession)

Clayton & Dubilier was founded as a turnaround management shop by Martin H. Dubilier, Eugene Clayton and Bill Welsh in 1976.[3] Joseph L. Rice III, a deal professional, putting the firm into investment business, joined in 1978, and the firm became known as Clayton, Dubilier & Rice in 1992.[3] Clayton and Welsh retired from the firm in 1985 and Dubilier died in 1991.[4]

The firm executed a leveraged buyout in 1987 of Borg-Warner's Industrial Products Division, spinning the division off into a standalone company, BW/IP International.[3] Between 1987 and 1992 the firm added nine new partners, five of which had previous experience as CEOs.[3]

In 1988, the firm acquired Uniroyal Goodrich Tire Company and a 50% stake of B.F. Goodrich for $225 million;[5][6] the Tire Company was sold to Michelin for $1.5 billion in 1989.[7]

In 1990, CD&R formed Lexmark from IBM's printer and keyboard manufacturing business.[3] The deal was named one of the 30 Most Influential Private Equity Deals by Private Equity International in 2004.[8]

In 1998, Don Gogel was appointed CEO.[9] Also in 1998, CD&R established an office in London.[10][11]

In 2001, Jack Welch, former CEO of General Electric, joined CD&R as a senior advisor.[12]

In 2003, CD&R purchased the global provider of water treatment products and services, Culligan International, from Veolia Environnement SA of France for $610 million, which included $200 million in equity from a CD&R-managed fund and the remainder from senior debt and securities.[13] In 2021, during its bid to buy out the UK supermarket chain Morrisons, the firm faced accusations of Asset Stripping, leaving Culligans 'saddled with over $850 million of debt',[14] while UK politicians warned against leaving Morrisons prey to asset strippers.[15] CD&R denied the accusations. Centerbridge Partners acquired Culligan in 2012.[16]

In 2005, CD&R teamed with Merrill Lynch, The Carlyle Group and Barclays to acquire The Hertz Corporation from Ford Motor Company for $15 billion.[17]

In 2011, CD&R and Ingersoll-Rand announced a partnership relating to Ingersoll's Hussmann division in which CD&R would acquire a 60 percent interest.[18]

In 2012, Joe Rice stepped down as chairman, succeeded by Don Gogel.[19][4]

In March 2013, CD&R partnered with the family owners of B&M retail, acquiring a 60 percent stake.[20] In October 2013, the firm acquired a 60% stake in John Deere Landscapes (now SiteOne Landscape Supply) in partnership with Deere & Co., which retained a 40 percent stake.[21][22]

In 2015, CD&R sold Hussmann to Panasonic for $1.5 billion.[23]

Clayton Dubilier & Rice Fund X LP completed fundraising in 2017 with $10 billion of investor commitments.[24]

CD&R acquired a 60% stake of Capco from FIS for $477 million in May 2017.[25] In August 2017, the firm acquired the Waterworks division of HD Supply for 2.5 billion, and changed its name to Core & Main.[26][27]

In January 2018, Clayton, Dubilier & Rice acquired Ply Gem Holdings, Inc. and Atrium Windows & Doors.[28] In October 2018, the firm acquired a stake in SmileDirectClub after investing $380 million.[29]

In 2018 CD&R acquired a 60% stake from the family owners of greeting card maker American Greetings, establishing a partnership.[30]

In January 2019, Clayton, Dubilier & Rice invested alongside the founder of WSH Investments Ltd., Alistair Storey, to take a major stake in the business.[31]

In July 2019, Clayton, Dubilier & Rice were included on Inc.'s 50 Best Private Equity Firms for Entrepreneurs list.[32]

In September 2019, CD&R acquired a stake in Socotec in a deal valuing Socotec at $1.98 billion.[19]

In August 2020, CD&R bought Epicor from KKR for $4.7 billion.[33]

In January 2021, CD&R purchased Wolseley UK, the largest supplier of plumbing and building materials in the UK, from Ferguson plc for £308m.[34]

In October 2021, CD&R purchased Morrisons, a British supermarket chain,[35] which subsequently had financial difficulties.[36]

In April 2022 CD&R acquired a 60% interest in Humana, Inc's hospice and personal care divisions (Kindred at Home) for US$2.8 billion.[37]

In July 2022, CD&R purchased the remaining common stock of Cornerstone Building Brands, completing its acquisition.[38]

In February 2023, CD&R agreed to buyout Focus Financial Partners in an all-cash deal for a total enterprise value of over $7 billion.[39]

References

  1. ^ Company Web site
  2. ^ "PEI 300 | The Largest Private Equity Firms in the World". Private Equity International. 2023-06-01. Retrieved 2023-06-02.
  3. ^ a b c d e Kester, W. Carl (May 1995). "Rehabilitating the Leveraged Buyout". Harvard Business Review. Harvard Business Publishing. Retrieved December 16, 2019.
  4. ^ a b Roumeliotis, Greg (April 26, 2012). "CD&R founder, private equity pioneer Rice steps down". Reuters. Reuters. Retrieved December 16, 2019.
  5. ^ Uniroyal Goodrich Tire Co reports earnings for Qtr to Sept 30, New York Times Archive, Published: October 14, 1988
  6. ^ Company News; Goodrich Outlook, REUTERS, New York Times Archive, Published: June 24, 1988
  7. ^ INSIDE, New York Times, Published: September 23, 1989
  8. ^ "The 30 most influential private equity deals". Private Equity International. Pirvate Equity International. June 2, 2004. Retrieved December 16, 2019.
  9. ^ Lewis, Adam (May 30, 2019). "CD&R becomes latest buyout shop to swap leadership". Pitchbook. Pitchbook Data. Retrieved December 18, 2019.
  10. ^ Povaly, Stefan (March 21, 2007). Private Equity Exits: Divestment Process Management for Leveraged Buyouts. Springer Science & Business Media. ISBN 9783540709541. Retrieved December 18, 2019.
  11. ^ "U.S. Firm's German Deal". The New York Times. June 17, 1998. Retrieved December 18, 2019.
  12. ^ Kauflin, Jeff (November 22, 2016). "Jack Welch's Third Act: An Online MBA Program That's Thriving". Forbes. Retrieved December 18, 2019.
  13. ^ Clayton, Dubilier & Rice completes buy of Culligan from Veolia. (1 October 2004). waterworld.com website.
  14. ^ CULLIGAN SOFT WATER COMPANY v CLAYTON DUBILIER & RICE, LLC. FILED: NEW YORK COUNTY CLERK 03/18/2019.
  15. ^ Faithfull, Mark. (4 October 2021). Politicians Warn Against Asset Sell-Off As CD&R Set To Buy Morrisons. Forbes.
  16. ^ "Centerbridge to buy Culligan in debt deal-sources". Reuters. 5 June 2012.
  17. ^ Merrell, Caroline (July 29, 2006). "Softly, softly, CDR lands the deal". The Times. Retrieved December 16, 2019.
  18. ^ Warner, Melodie (August 8, 2011). "Ingersoll-Rand sells 60% Hussmann for $370 mln". MarketWatch. MarketWatch Inc. Retrieved December 18, 2019.
  19. ^ a b Louch, William (25 September 2019). "CD&R Agrees to Buy Socotec Stake at $2 Billion Valuation". Wall Street Journal.
  20. ^ Butler, Sarah (21 December 2012). "B&M Bargains sets sights on European expansion". The Guardian.
  21. ^ "Deere to Sell Majority Interest in Landscapes Business". 28 October 2013. Retrieved 18 November 2013.
  22. ^ "John Deere Landscapes Unveils New Name as SiteOne Landscape Supply". 14 August 2015. Retrieved 13 October 2016.
  23. ^ "CD&R to exit Hussmann to Panasonic in $1.5B+ deal". Pitchbook. Pitchbook Data. December 22, 2015. Retrieved December 18, 2019.
  24. ^ Dorbian, Iris (April 19, 2017). "CD&R closes 10th fund at $10 bln". PE Hub. PE Hub. Retrieved December 18, 2019.
  25. ^ "FIS To Sell 60% Equity Interest In Capco; To Receive $477 Mln In Cash Proceeds". Nasdaq. 23 May 2017. Archived from the original on 2017-06-04.
  26. ^ "HD Supply Waterworks Changes Name To Core Main". Water Online. 30 August 2017.
  27. ^ bloomberg.com – Trading Companies and Distributor: Company Overview of HD Supply Waterworks Group and HD Supply Waterworks and Certain Other Waterworks Business Assets
  28. ^ "Ply Gem Holdings, Inc. Enters into a Definitive Agreement to be Acquired by Clayton, Dubilier & Rice". Retrieved 17 July 2018.
  29. ^ "Orthodontics Startup SmileDirectClub Gets $3.2 Billion Valuation". Bloomberg.com. 10 October 2018.
  30. ^ Rice, Clayton, Dubilier. "Clayton, Dubilier & Rice to Acquire Majority Interest in American Greetings". www.prnewswire.com. Retrieved 2018-02-13.{{cite web}}: CS1 maint: multiple names: authors list (link)
  31. ^ "P.S. Buyout Firm Takes Major Stake in U.K. Restaurant Operator Despite Brexit Uncertainty". Wall Street Journal. 7 January 2019. Retrieved 16 January 2019.
  32. ^ Winfrey, Graham (July 2019). "The 50 Best Private Equity Firms for Entrepreneurs". Inc. Inc. Retrieved December 16, 2019.
  33. ^ "KKR to sell Epicor Software in $4.7 billion deal, 4 years after buying the company". MarketWatch. August 31, 2020.
  34. ^ "New owners for Wolseley UK". The Construction Index. 4 January 2021.
  35. ^ "Morrisons sale: US firm CD&R wins £7bn auction for supermarket". TheGuardian.com. 2 October 2021.
  36. ^ Butler, Sarah (27 February 2023). "Is private equity tearing the soul out of Morrisons supermarket?". The Guardian.
  37. ^ "Humana to sell majority stake in hospice business to CD&R for $2.8 billion". Reuters. 2022-04-21. Retrieved 2022-04-30.
  38. ^ "Clayton, Dubilier & Rice Completes Acquisition of Cornerstone Building Brands". www.businesswire.com. 25 July 2022. Retrieved 25 July 2022.
  39. ^ Yasmin, Mehnaz (February 27, 2023). "CD&R to take Focus Financial private in over $7 bln deal". Reuters.
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