Leonard Green & Partners

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Leonard Green & Partners
Type Private Ownership
Founded 1989
Headquarters Los Angeles, California
Industry Private Equity
Products Leveraged Buyout
Total assets $9 billion[1]
Employees 25+ (2007)
Website www.leonardgreen.com

Leonard Green & Partners is a private equity firm specializing in leveraged buyout transactions, particularly of middle market companies. As of the end of 2007, the firm had with approximately $9 billion in assets under management.

The firm, which was founded in 1989 has approximately 25 employees based in its Los Angeles, California offices.

Contents

[edit] Investments

Leonard Green is currently investing its fifth fund, Green Equity Investors V, LP, which it completed fundraising in March 2007 with over $5.3 billion of investor commitments. The firm's most recent fund is nearly three times the size of its previous fund the $1.85 billion Green Equity Investors V, LP.[2] Leonard Green had previously raised $1.24 billion for its third fund in 1998, $311 million for its second fund in 1994 and $216 million for its debut fund in 1990.[3] At the end of 2007, Leonard Green was ranked #32 among the 50 largest private equity firms globally.

As of the end of 2007, Leonard Green had completed investments in 45 companies with aggregate value of $34 billion, since its founding in 1989. Among the firm's historical investments are the following:

  • Petco, (2000, 2006) Leonard Green and TPG Capital invested $200 million to acquire the pet supplies retailer as part of a $600 million buyout. Within two years they sold most of it in a public offering that valued the company at $1 billion. Petco’s market value more than doubled by the end of 2004 and the firms would ultimately realize a gain of $1.2 billion. Then, in 2006, the private equity firms took Petco private again for $1.68 billion.[5][6]
  • FTD Group, Inc., October 2003. Leonard Green announced a $445.4 million going private acquisition of FTD in which the firm invested $179.0 million. On February 8, 2005, FTD completed an initial public offering.[10]


[edit] History

Leonard Green was founded by Leonard I. Green in 1989 after separating from Gibbons, Green and van Amerongen Ltd. (Gibbons Green), a merchant banking which he had co-founded in 1969 with Edward I. Gibbons and Lewis W. van Amerongen. The firm's eponymous founder, Leonard I. Green died in 2002, leaving the firm to be run by John G. Danhakl, Peter J. Nolan and Jonathan D. Sokoloff (who had been Green's bankers at Drexel Burnham Lambert and Donaldson, Lufkin & Jenrette prior to joining the firm).

[edit] Gibbons, Green and van Amerongen Ltd.

The firm's predecessor, Gibbons Green had completed over 29 transactions with an aggregate purchase price of over $3.5 billion from 1969 through its dissolution in 1989 and was among the earliest practitioners of the leveraged buyout and management buyout. Among its most notable transactions were the purchase of Budget Rent a Car (1986) from Transamerica in 1986 as well as the acquisition of Kash n' Karry Food Stores. The firm completed the 1982 buyout of Purex Industries[14] but had to withdraw from the 1987 buyout of insurer Argonaut due to the stock market crash in that year.[15]

The dissolution of Gibbons Green and the formation of Leonard Green & Partners is primarily attributed to the failure of two buyouts, with which Green contended he had not been actively involved: Ohio Mattress Company and Sheller-Globe Corporation.[16][17][18]

  • Ohio Mattress Company – On March 7, 1989, Ohio Mattress Company, known for its Sealy and Stearns & Foster brands, was sold to Gibbons Green for $1.1 billion, a price that many observers at the time believed too high. In August 1989, the junk bond market collapsed, leaving First Boston unable to redeem hundreds of millions it had lent for the leveraged buyout of Ohio Mattress. The amount lent, $457 million, was 40 percent of First Boston’s equity capital and the bank was forced to seek a bailout from Credit Suisse, leading subsequently to the takeover of First Boston and the formation of CS First Boston.[19] The incident became known as "The Burning Bed"[20] and ultimately Gibbons Green was forced to offer a significant equity stake in the company in order to secure financing.
  • Sheller-Globe Corporation – Gibbons, Green bought Sheller-Globe jointly with United Technologies from Knoll International. When the company faced an immediate cash squeeze, United Technologies stepped in to buy out the shares owned by Gibbons Green. With no other options, Gibbons Green realized a $30 million loss on its investment. Gibbons Green accused Knoll of providing misleading or incomplete information, however observers believed the firm had not conducted proper due diligence.[17][21]

[edit] References

  1. ^ Capital raised since inception in 1989
  2. ^ Tracy, Tennille "Leonard Green: Keeping Up With the Jones." Wall Street Journal, March 28, 2007
  3. ^ Source: Private Equity Intelligence
  4. ^ "Rite Aid Sets an Extension on Payment of $1.3 Billion in Debt." New York Times, October 28, 1999
  5. ^ "COMPANY NEWS; MANAGEMENT-LED GROUP TO BUY PETCO FOR $505 MILLION." New York Times, May 18, 2000
  6. ^ "2 Equity Firms to Acquire Petco ." Bloomberg, July 15, 2006.
  7. ^ Steinhauer, Jennifer. "http://query.nytimes.com/gst/fullpage.html?res=9503EEDA163EF930A35754C0A96E958260." New York Times, July 3, 1998
  8. ^ "COMPANY NEWS; SPORTS AUTHORITY AND GART SPORTS AGREE TO MERGE." New York Times, February 21, 2003
  9. ^ "COMPANY NEWS; UNIFORM MAKER AGREES TO $131 MILLION BUYOUT." New York Times, April 23, 2003
  10. ^ "COMPANY NEWS; GREEN EQUITY INVESTORS TO BUY FTD FOR $420 MILLION." New York Times, October 7, 2003
  11. ^ "Today In Business | Federated Sells Bridal Unit." New York Times, November 18, 2006.
  12. ^ Wilson, Eric. "Lifting the Veil on Seventh." New York Times, April 26, 2007
  13. ^ Hughes, Elaine. "Private firm buys Container Store." USA Today, July 2, 2007.
  14. ^ "Purex Merger Is Approved." New York Times, August 12, 1982
  15. ^ "COMPANY NEWS; Gibbons Cancels Argonaut Buyout." New York Times, December 23, 1987.
  16. ^ Bartlett, Sarah. "Wall Street's Treacherous Side." New York Times, November 6, 1989.
  17. ^ a b Bartlett, Sarah. "Filing Discloses Dispute Over Sale of Sheller-Globe." New York Times, October 13, 1989.
  18. ^ "Gibbons, Green Separation." New York Times, May 5, 1989.
  19. ^ EICHENWALD, KURT. "COMPANY NEWS; Sealy Holdings Agrees To Financing Terms." New York Times, April 27, 1990.
  20. ^ "The Burning Bed". BusinessWeek, May 1990.
  21. ^ Bartlett, Sarah. "Two at Knoll Sued Over Sale of Subsidiary." New York Times, November 3, 1989.

[edit] External links