HM Capital
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HM Capital is a private equity firm in the United States that specializes in leveraged buyouts. The firm was previously known as Hicks, Muse, Tate & Furst. The firm was founded in 1989 by Tom Hicks and John Muse as Hicks, Muse & Co. and was changed in 1994 to reflect the roles of Charles Tate and Jack Furst.
[edit] History
The son of a Texas radio station owner, Tom Hicks became interested in leveraged buyouts as a member of First National Bank's venture capital group. Hicks and Robert Haas formed Hicks & Haas in 1984; the next year that firm bought Hicks Communications, a radio outfit run by Hicks' brother Steven. (This would be the first of many media companies bought or created by the buyout firm, often with Steven Hicks' involvement.)
Hicks & Haas' biggest coup was its mid-1980s buy of several soft drink makers, including Dr Pepper and 7 Up. The firm took Dr Pepper/7 Up public just 18 months after merging the two companies. In all, Hicks & Haas turned $88 million of investor funding into $1.3 billion. The pair split up in 1989; Hicks wanted to raise a large pool to invest, but Haas preferred to work deal by deal.
Hicks raised $250 million in 1989 and teamed with former Prudential Securities banker John Muse. Early investments included Life Partners Group (life insurance, 1990; sold 1996). In 1991 Morgan Stanley's Charles Tate and First Boston's Jack Furst became partners.
As part of its buy-and-build strategy, Hicks Muse bought DuPont's connector systems unit in 1993, renamed it Berg Electronics, added six more companies to it, and doubled its earnings before selling it in 1998. Not every move was a star in the Hicks Muse crown. Less-than-successful purchases included bankrupt brewer G. Heileman Brewing Company of La Crosse, Wisconsin, bought in 1994 and sold two years later for an almost $100 million loss.
The buyout firm's Chancellor Media radio company went public in 1996. That year Hicks Muse gained entry into Latin America with its purchases of cash-starved Mexican companies, including Seguros Commercial America, one of the country's largest insurers. That year also brought International Home Foods (Jiffy Pop, Chef Boyardee) into the Hicks Muse fold.
In 1997 Chancellor and Evergreen Media merged to form Chancellor Media (renamed AMFM in 1999). The next year Hicks Muse continued buying US and Latin American media companies, as well as a few oddities (a UK software maker, a Danish seed company, and US direct-seller Home Interiors & Gifts]). Hicks Muse and Kohlberg Kravis Roberts merged their cinema operations to form the US's largest theater chain. The company that year also moved into the depressed energy field (Triton Energy) and formed a $1.5 billion European fund.
Buys in 1999 included UK food group Hillsdown Holdings, one-third of Mexican flour maker Grupo Minsa, and (just in time for millennial celebrations) popular champagne brands Mumm and Perrier-Jouët (it quadrupled its investment when it sold the champagne houses in late 2000). Lured by low stock prices on real estate investment trusts (REITs), the company agreed to buy Walden (formerly Walden Residential Properties) that year.
Hicks Muse, along with UK-based Apax Partners, bought BT's yellow pages firm Yell for roughly $3.5 billion, making it the largest non-corporate LBO in European history. Yell bought US directories publisher McLeodUSA for about $600 million, and floated in 2003.
Hicks Muse spotted a tasty deal and bought Nestlé's Ambient Food Business in 2002, which added well-known UK brands Crosse & Blackwell, Branston Pickle, Chivers (marmalade), Sun-Pat (peanut butter), Gale's (honey), Sarson's (vinegar) and Rowntree's (jelly) to the Premier Foods stable. Cereal maker Weetabix Limited and Unilever's cast-offs Ambrosia (creamed rice and puddings) and Brown & Polson, rounded out Premier Foods' portfolio in 2003.
Acquisitions in 2004 included Kerns Oil & Gas (renamed Blackbrush Energy -- natural gas production), Persona (Canadian cable television company), Regency Gas Services (gas processing and distribution), and Centennial Puerto Rico Cable TV (Puerto Rican cable television company). It also agreed to buy a majority stake in trendy luxury shoemaker Jimmy Choo. Disposals during the year included the company's remaining stake in Yell and its stake in Premier Foods. Thomas Hicks retired at the end of 2004; co-founder John Muse replaced him at the helm of the firm.
The company's European arm, which has been on a roll, split from the company in January of 2005.
