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Leonard Green & Partners

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Leonard Green & Partners, L.P.
Company typePrivate
IndustryPrivate equity
FoundedJanuary 7, 1989; 35 years ago (1989-01-07)
FounderLeonard I. Green
HeadquartersLos Angeles, California, United States
ProductsLeveraged buyout
AUMUS$77.8 billion (2024)
Number of employees
87 (2024)
Websiteleonardgreen.com

Leonard Green & Partners, L.P. (LGP) is an American private equity investment firm founded in 1989 and based in Los Angeles.[1] The firm specializes in private equity investments. LGP has invested in over 95 companies since its inception, including Petco and The Container Store.[2][3]

In June 2023, Leonard Green & Partners were ranked 20th in Private Equity International's PEI 300 ranking of the largest private equity firms in the world.[4]

History

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Leonard Green was founded by Leonard I. Green in 1989[5] after separating from Gibbons, Green and van Amerongen Ltd. (Gibbons Green), a bank which he had co-founded in 1969 with Edward Gibbons and Lewis van Amerongen.[6][7] Leonard Green died in 2002, leaving the firm to be run by John G. Danhakl, Peter J. Nolan and Jonathan D. Sokoloff.[5]

The firm's predecessor, Gibbons Green was among the earliest practitioners of the leveraged buyout and management buyout.[6][7] Gibbons Green purchased several companies, including Purex Industries in 1982,[8] Budget Rent a Car from Transamerica in 1986 and Kash n' Karry Food Stores in 1988.[6][7][9] The company planned to purchase Argonaut Group Inc in 1987, but withdrew from the buyout.[10]

The dissolution of Gibbons Green and the formation of Leonard Green & Partners is attributed by some to the failure of two buyouts: Ohio Mattress Company and Sheller-Globe Corporation.[11][12][13]

In 2007, LGP acquired 17% shares of Whole Foods Market in a PIPE investment deal, "one of the best investments in our firm’s history" according to firm manager Jonathan Sokoloff, because it enabled LGP to acquire J.Crew, BJ’s Wholesale Club and Jo-Ann Stores with the cash made from Whole Foods.[14]

In 2019, LGP named John Baumer and Evan Hershberg co-heads of the Jade Fund.[15]

In March 2020, partners at LGP committed to plans for a $10 million employee-assistance fund for employees of Leonard Green portfolio companies impacted by the COVID-19 pandemic.[16][17]

Notable investments

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Company Year acquired Shares Year divested Sold to Sources
Thrifty Payless 43%, owned with Kmart 1996 Rite Aid Corporation [18]
Leslie's Poolmart 1997 [19][better source needed]
Petco 2000 [2][better source needed]
The Container Store 2007 [3]
Whole Foods Market 2009 17% (PIPE investment) 2011: 11 million shares sold (less than half of LGP's stake) [20][14]
Jo-Ann Stores 2010 [21]
Prospect Medical Holdings 2010 61.3% 2021 [22]
Shake Shack 2012 [23]
PureGym 2017 [24]
The Shade Store 2018 [25]
WellSky (health tech) 2020 owned with TPG Capital [26]
Warburg Pincus [27][28]

In 2016, LGP closed Green Equity Investors VII, L.P. ("GEI VII"), with $9.6 billion of committed capital.[29] In 2019, LGP raised $14.75 billion for two new funds.[15]

In February 2021, ProPublica reported on a dispute between LGP and Rhode Island's regulators and legislators over LGP's divestment in Prospect Medical Holdings.[30][31] Approval for LGP's attempted sale of its 60% stake in Prospect to its co-owners was held up by the Rhode Island attorney general, who, given the dire financial situation LGP was leaving the health system in, conditioned its approval on LGP placing $120-150 million in escrow to back up its two fiscally strained hospitals in the state. LGP had in 2018 initiated a dividend recapitalization which landed it and its investors $658.4 million in dividends and management fees, and the next year sold Prospect's real estate in three states to Medical Properties Trust for $1.386 billion, leaving it with long-term lease obligations of $1.3 billion. In response to the AG's conditions, LGP threatened to shut down the hospitals. The pressure of potential loss of healthcare services led the AG to lower the escrow obligation to $80 million while also requiring LGP to commit over $30 million to the system during the transition.[32]

References

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  1. ^ "Leonard Green & Partners, L.P.: Private Company Information – Bloomberg". www.bloomberg.com. Retrieved 2017-10-03.
  2. ^ a b "COMPANY NEWS; MANAGEMENT-LED GROUP TO BUY PETCO FOR $505 MILLION". New York Times. 2000-05-18. Retrieved 2013-12-10.
  3. ^ a b Hughes, Elaine (2007-07-02). "Private firm buys Container Store". Usatoday.Com. Archived from the original on 2007-07-05. Retrieved 2013-12-10.
  4. ^ "PEI 300 | The Largest Private Equity Firms in the World". Private Equity International. 2023-06-01. Retrieved 2023-06-02.
  5. ^ a b Witkowsky, Christopher (2011-10-06). "Leonard Green changes terms amid fundraise". Private Funds CFO. Retrieved 2019-10-15.
  6. ^ a b c "Gibbons, Green Separation". The New York Times. 1989-05-05. ISSN 0362-4331. Retrieved 2019-12-06.
  7. ^ a b c "Gibbons, Green Adept in Risky Field : Bicoastal Firm Becomes Major Player in Leveraged Buyouts". Los Angeles Times. 1986-09-07. Retrieved 2019-12-06.
  8. ^ "Purex Merger Is Approved". The New York Times. 1982-08-12. Retrieved 2016-04-28.
  9. ^ Staff, Denise L. Smith of The Sentinel. "KASH N' KARRY BUYS MARKETS FROM KROGER". OrlandoSentinel.com. Retrieved 2019-12-06.
  10. ^ Special to the New York TimesPublished: December 23, 1987 (1987-12-23). "COMPANY NEWS; Gibbons Cancels Argonaut Buyout". New York Times. Retrieved 2013-12-10.{{cite news}}: CS1 maint: numeric names: authors list (link)
  11. ^ Bartlett, Sarah (1989-11-06). "Wall Street's Treacherous Side". New York Times. Retrieved 2013-12-10.
  12. ^ Bartlett, Sarah (1989-10-13). "Filing Discloses Dispute Over Sale of Sheller-Globe". New York Times. Retrieved 2013-12-10.
  13. ^ Published: May 05, 1989 (1989-05-05). "Gibbons, Green Separation". New York Times. Retrieved 2013-12-10.{{cite news}}: CS1 maint: numeric names: authors list (link)
  14. ^ a b Dowd, Kevin (2017-03-17). "This day in buyout history: LGP closes one of the most successful pre-crisis megafunds". PitchBook. Retrieved 2024-06-15.
  15. ^ a b Bunker, Ted (2019-12-09). "WSJ News Exclusive | Buyout Firm Leonard Green Raises Nearly $15 Billion for Two New Funds". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-02-19.
  16. ^ Witkowsky, Chris (2020-03-19). "Leonard Green executives to form $10m employee-assistance fund". Buyouts. Retrieved 2020-07-21.
  17. ^ "PE Daily: Leonard Green Partners Commit to Employee Assistance Funds | Crude Price Drop Dooms First Reserve Portfolio Company | KKR Defies Chaos". Wall Street Journal. 2020-03-19. ISSN 0099-9660. Retrieved 2020-07-21.
  18. ^ "Rite Aid to buy rival chain - Oct. 14, 1996". money.cnn.com. Retrieved 2020-11-11.
  19. ^ "LESLIE'S POOLMART TAKEN PRIVATE IN $140 MILLION DEAL – New York Times". The New York Times. 1997-06-13. Retrieved 2013-12-10.
  20. ^ Paumgarten, Nick (2009-12-27). "Food Fighter". The New Yorker. ISSN 0028-792X. Retrieved 2024-06-15.
  21. ^ "Leonard Green to buy Jo-Ann Stores for $1.6 billion". Reuters. 2010-12-23. Retrieved 2024-06-15.
  22. ^ Batt, Rosemary; Appelbaum, Eileen; Katz, Tamar (July 9, 2024). "The Role of Public REITs in Financialization and Industry Restructuring" (PDF). Institute for New Economic Thinking. doi:10.36687/inetwp189. Archived from the original (PDF) on March 31, 2024. Retrieved September 2, 2024.
  23. ^ Severson, Kim; De La Merced, Michael (29 January 2015). "Shake Shack, Born in a Park, Is Going Public With Big Dreams". DealBook. Archived from the original on 6 October 2019. Retrieved 2020-02-19.
  24. ^ "Pure Gym sold to Leonard Green private equity house". www.ft.com. Retrieved 2024-06-15.
  25. ^ Hirsch, Lauren (2018-08-09). "Private equity giant Leonard Green takes another chance on retail, buying online retailer Shade Store". CNBC. Retrieved 2018-08-17.
  26. ^ Collins, Leslie (21 July 2020). "WellSky adds Leonard Green as new majority stakeholder". Kansas City Business Journal.
  27. ^ Cutchin, James (5 November 2020). "Leonard Green Acquires Service Logic | Los Angeles Business Journal". Los Angeles Business Journal. Retrieved 2020-11-09.
  28. ^ Bunker, Ted (2020-10-15). "Leonard Green Emerges as Buyer for Warburg's Service Logic". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-11-09.
  29. ^ "Leonard Green and Partners | Leading private equity investment firm based in Los Angeles". www.leonardgreen.com. Retrieved 2017-09-07.
  30. ^ Elkind, Peter (February 4, 2021). "Rich Investors Stripped Millions From a Hospital Chain and Want to Leave It Behind. A Tiny State Stands in Their Way". ProPublica. Retrieved February 7, 2021.
  31. ^ Elkind, Peter; Burke, Doris (September 30, 2020). "Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn't Pay for Medical Supplies or Gas for Ambulances". ProPublica. Retrieved February 7, 2021.
  32. ^ Batt, Rosemary; Appelbaum, Eileen; Katz, Tamar (July 9, 2024). "The Role of Public REITs in Financialization and Industry Restructuring" (PDF). Institute for New Economic Thinking. doi:10.36687/inetwp189. Archived from the original (PDF) on March 31, 2024. Retrieved September 2, 2024.
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