Bain Capital
Encyclopedia
Bain Capital LLC is a Boston
-based private equity
firm founded in 1984 by partners from the consulting firm Bain & Company
. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private equity, venture capital, public equity, high-yield assets and mezzanine capital
funds.
partners Mitt Romney
T. Coleman Andrews III, and Eric Kriss
. In addition to the four founding partners, the early team included Fraser Bullock
, Robert F. White, Joshua Bekenstein
, Adam Kirsch, and Geoffrey S. Rehnert. Bain Capital's original $37 million fund was raised entirely from private individuals in mid-1984.
The firm includes a large group of investment professionals with consulting or operating experience, and takes an intensive, analytical approach to the investment process. This allows the firm's teams to pursue a wide range of equity investment opportunities, and to conduct extensive diligence, to do a fact-based analysis of the business and competitive industry dynamics, and to identify a winning business model. Thus, Bain Capital turns a profit on floundering corporations by buying them at low cost, stripping away any projects that aren't profiting or that lack potential, and laying off any excess workers. One of the fund's first start-up investments was Staples, Inc.
, the $15 billion office supply
retailer. The funding enabled Staples to expand from one store in 1986 to over 2000 stores in 2011.
More than 25 years after its inception, Bain Capital manages approximately $65 billion in assets, and has founded, acquired, or invested in hundreds of companies including AMC Entertainment, Aspen Education Group
, Brookstone
, Burger King
, Burlington Coat Factory
, Domino's Pizza
, DoubleClick
, D&M Holdings
, Guitar Center
, Hospital Corporation of America (HCA)
, Sealy
, The Sports Authority, Toys R Us, Unisource, Warner Music Group
and The Weather Channel.
In 2011, Bain Capital employed around 80 managing directors and approximately 400 professionals who most have prior experience in consulting or other related businesses.
, venture capital
, public equity and leveraged debt assets.
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
-based private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm founded in 1984 by partners from the consulting firm Bain & Company
Bain & Company
Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. Bain is considered one of the most prestigious consulting firms in the world, with 47 offices in 30 countries and over 5,500 professionals on staff globally...
. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private equity, venture capital, public equity, high-yield assets and mezzanine capital
Mezzanine capital
Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares...
funds.
History
Bain Capital was founded in 1984 by Bain & CompanyBain & Company
Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. Bain is considered one of the most prestigious consulting firms in the world, with 47 offices in 30 countries and over 5,500 professionals on staff globally...
partners Mitt Romney
Mitt Romney
Willard Mitt Romney is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and is a candidate for the 2012 Republican Party presidential nomination.The son of George W...
T. Coleman Andrews III, and Eric Kriss
Eric Kriss
Eric Arthur Kriss is a musician and business executive who served as Secretary of Administration and Finance in Massachusetts Governor Romney's cabinet , and as assistant A&F secretary under Governor William Weld...
. In addition to the four founding partners, the early team included Fraser Bullock
Fraser Bullock
Fraser Bullock is an American entrepreneur who is the Managing Director of Sorenson Capital and former COO/CFO of the 2002 Winter Olympics. He graduated with a B.A. in 1978 and an MBA in 1980—both of the degrees from Brigham Young University...
, Robert F. White, Joshua Bekenstein
Joshua Bekenstein
Joshua Bekenstein is an American businessman and top executive at Bain Capital. He joined Bain Capital at its inception in 1984. He has been a Managing Director since 1986. Prior to joining Bain Capital, Bekenstein spent several years at Bain & Company where he was involved with companies in a...
, Adam Kirsch, and Geoffrey S. Rehnert. Bain Capital's original $37 million fund was raised entirely from private individuals in mid-1984.
The firm includes a large group of investment professionals with consulting or operating experience, and takes an intensive, analytical approach to the investment process. This allows the firm's teams to pursue a wide range of equity investment opportunities, and to conduct extensive diligence, to do a fact-based analysis of the business and competitive industry dynamics, and to identify a winning business model. Thus, Bain Capital turns a profit on floundering corporations by buying them at low cost, stripping away any projects that aren't profiting or that lack potential, and laying off any excess workers. One of the fund's first start-up investments was Staples, Inc.
Staples, Inc.
Staples Inc. is a large office supply chain store, with over 2,000 stores worldwide in 26 countries. Based in Framingham, Massachusetts, United States, the company has retail stores, serving customers under its original name in Austria, Brazil, China, France, Germany, India, Italy, Norway,...
, the $15 billion office supply
Office Supply
Office Supply is a New Wave band consisting of three keyboardists. The band has successfully released their debut album Work in Progress, on the independent record label Toaster Records on April 30, 2006...
retailer. The funding enabled Staples to expand from one store in 1986 to over 2000 stores in 2011.
More than 25 years after its inception, Bain Capital manages approximately $65 billion in assets, and has founded, acquired, or invested in hundreds of companies including AMC Entertainment, Aspen Education Group
Aspen Education Group
Aspen Education Group is an American, for-profit business organization that operates a variety of therapeutic treatment programs for troubled adolescents, including wilderness therapy programs, residential treatment centers, therapeutic boarding schools, and weight loss programs. Aspen is a...
, Brookstone
Brookstone
Brookstone is a chain of retail stores in the United States. Its first store was opened in 1973 in Peterborough, New Hampshire. Its headquarters are currently located in Merrimack, New Hampshire....
, Burger King
Burger King
Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States. The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain...
, Burlington Coat Factory
Burlington Coat Factory
Burlington Coat Factory Warehouse Corporation is a national department store retailer focusing on clothing and shoes, with over 450 stores in 45 states and Puerto Rico.. In 2006, it was acquired by Bain Capital, LLC in a take-private transaction...
, Domino's Pizza
Domino's Pizza
Domino's Pizza, Inc. is an international pizza delivery corporation headquartered in Ann Arbor, Michigan, United States of America. Founded in 1960, Domino's is the second-largest pizza chain in the United States and has over 9,000 corporate and franchised stores in 60 countries and all 50 U.S....
, DoubleClick
DoubleClick
DoubleClick is a subsidiary of Google that develops and provides Internet ad serving services. Its clients include agencies, marketers and publishers who serve customers like Microsoft, General Motors, Coca-Cola, Motorola, L'Oréal, Palm, Inc., Apple Inc., Visa USA, Nike, Carlsberg among others...
, D&M Holdings
D&M Holdings
D&M Holdings is a Japanese corporation that owns several audio and video brands. It was formed in 2002 from the merger of Denon and Marantz. It has acquired several other companies since that time. In 2008 it was acquired by K. K. BCJ-2, a Tokyo corporation owned by investment funds advised...
, Guitar Center
Guitar Center
Guitar Center is the largest chain of musical instrument retailers in the world with 223 locations throughout the United States. Its headquarters is in Westlake Village, California....
, Hospital Corporation of America (HCA)
Hospital Corporation of America
Hospital Corporation of America is the largest private operator of health care facilities in the world, It is based in Nashville, Tennessee and is widely considered to be the single largest factor in making that city a hotspot for healthcare enterprise.-History:The founders of HCA include Jack C....
, Sealy
Sealy Corporation
Sealy Corporation is an American owned major manufacturer of mattresses, based in Trinity, North Carolina, in the United States. The company draws its name from the city where it started, Sealy, Texas.- History :...
, The Sports Authority, Toys R Us, Unisource, Warner Music Group
Warner Music Group
Warner Music Group is the third largest business group and family of record labels in the recording industry, making it one of the big four record companies...
and The Weather Channel.
In 2011, Bain Capital employed around 80 managing directors and approximately 400 professionals who most have prior experience in consulting or other related businesses.
Recent notable investments
Some recent proposed and actual Bain Capital investments include (in reverse chronological order):- 2010, Oct – Acquires Gymboree for $1.8 Billion USD.
- 2010, Mar – Wall Street Journal reports that Psychiatric SolutionsPsychiatric SolutionsPsychiatric Solutions, Inc. is a subsidiary of Universal Health Services and operates psychiatric hospitals in 32 states.-History:Joey Jacobs, a former executive of Hospital Corporation of America for over 20 years, founded Psychiatric Solutions, Inc. in 1997...
is in talks to be purchased by Bain. - 2010, Mar – Purchases Styron (polystyrenePolystyrenePolystyrene ) also known as Thermocole, abbreviated following ISO Standard PS, is an aromatic polymer made from the monomer styrene, a liquid hydrocarbon that is manufactured from petroleum by the chemical industry...
, latexLatexLatex is the stable dispersion of polymer microparticles in an aqueous medium. Latexes may be natural or synthetic.Latex as found in nature is a milky fluid found in 10% of all flowering plants . It is a complex emulsion consisting of proteins, alkaloids, starches, sugars, oils, tannins, resins,...
), a division of The Dow Chemical CompanyDow Chemical CompanyThe Dow Chemical Company is a multinational corporation headquartered in Midland, Michigan, United States. As of 2007, it is the second largest chemical manufacturer in the world by revenue and as of February 2009, the third-largest chemical company in the world by market capitalization .Dow...
, for $1.6 billion. - 2009, Jun – Bain Capital announces a deal to acquire a 16% stake in Chinese electronics manufacturer GOME Electrical AppliancesGOME Electrical AppliancesGOME Electrical Appliances Holding Limited is one of the largest privately-owned electrical appliance retailers in Mainland China and Hong Kong. It was founded by Wong Kwong Yu , a Chinese businessman, in Beijing in 1987. Its brand name "GOME" was first adopted in 1993...
for $300 million. - 2008, Jul – Joins with Thomas H. Lee PartnersThomas H. Lee PartnersThomas H. Lee Partners is a private equity firm based in Boston, Massachusetts specializing in leveraged buyouts, growth capital, special situations, industry consolidations, and recapitalizations....
to purchase Clear Channel CommunicationsClear Channel CommunicationsClear Channel Communications, Inc. is an American media conglomerate company headquartered in San Antonio, Texas. It was founded in 1972 by Lowry Mays and Red McCombs, and was taken private by Bain Capital LLC and Thomas H. Lee Partners LP in a leveraged buyout in 2008...
. - 2008, July – Acquision of D&M HoldingsD&M HoldingsD&M Holdings is a Japanese corporation that owns several audio and video brands. It was formed in 2002 from the merger of Denon and Marantz. It has acquired several other companies since that time. In 2008 it was acquired by K. K. BCJ-2, a Tokyo corporation owned by investment funds advised...
for $442 million. http://www.twice.com/article/243122-D_M_Saga_Finally_Ends_With_Bain_Capital_Deal.php - 2007, Sep – Joins with the Chinese networking company Huawei Technologies in an attempt to acquire 3Com3Com3Com was a pioneering digital electronics manufacturer best known for its computer network infrastructure products. The company was co-founded in 1979 by Robert Metcalfe, Howard Charney, Bruce Borden, and Greg Shaw...
for $2.2 billion in cash. However, they were unable to structure the deal to satisfy constraints set by Committee on Foreign Investment in the United States (CFIUS). In March 2008, Bain and Huawei abandoned the transaction. - 2007, Jun – Signs an agreement with Guitar CenterGuitar CenterGuitar Center is the largest chain of musical instrument retailers in the world with 223 locations throughout the United States. Its headquarters is in Westlake Village, California....
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. - 2007, Jun – Agrees to acquire HD SupplyHD SupplyHD Supply is a leading wholesale distribution company, providing a broad range of products and services to professional customers in the infrastructure & energy, maintenance, repair & improvement and specialty construction markets. With a diverse portfolio of industry-leading businesses, HD Supply...
for $10.3 billion, along with Carlyle GroupCarlyle GroupThe Carlyle Group is an American-based global asset management firm, specializing in private equity, based in Washington, D.C. The Carlyle Group operates in four business areas: corporate private equity, real assets, market strategies and fund-of-funds, through its AlpInvest subsidiary...
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. - 2007, Jun – Acquires Bavaria YachtbauBavaria YachtbauThe Bavaria Yachtbau GmbH is a German major yacht builder, with its headquarters in Giebelstadt, Bavaria, Germany. The model range consists of both sailing and motor yachts, of which especially the sailing yachts are very common. With ca. 600 employees, ca...
for a price rumored to be about €1.3B Euros. - 2007, May – Acquires Edgars Department Stores (Edcon Limited) of Zimbabwe and South Africa.
- 2006, Aug – Joins the enlarged private equity consortium headed by KKRKohlberg Kravis Roberts & Co.KKR & Co. L.P. is an American-based global private equity firm, specializing in leveraged buyouts, based in New York. The firm sponsors and manages private equity investment funds. Since its inception, the firm has completed over $400 billion of private equity transactions and was a pioneer in...
that agreed to acquire an 80.1% stake in the Semiconductor Division of Royal Philips ElectronicsPhilipsKoninklijke Philips Electronics N.V. , more commonly known as Philips, is a multinational Dutch electronics company....
. The new company is called NXP Semiconductors. - 2006, Apr – Acquires Burlington Coat FactoryBurlington Coat FactoryBurlington Coat Factory Warehouse Corporation is a national department store retailer focusing on clothing and shoes, with over 450 stores in 45 states and Puerto Rico.. In 2006, it was acquired by Bain Capital, LLC in a take-private transaction...
Warehouse Corp., which operates more than 360 retail stores. - 2005, Jun – Teams up with HaierHaierHaier Group is a multinational consumer electronics and home appliances company headquartered in Qingdao, Shandong, People's Republic of China. Its products include air conditioners, mobile phones, computers, microwave ovens, washing machines, refrigerators, and televisions...
Group, China's largest appliance maker, and private equity firm Blackstone GroupBlackstone GroupThe Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
in an attempt to acquire MaytagMaytagMaytag Corporation is an American home and commercial appliance company, headquartered in Newton, Iowa, that is a division of the Whirlpool Corporation.-Company history:...
for over $1 billion. The bid was dropped a month later. - 2005, Mar – Proposes a $3.5 billion buyout of all 30 teams in the National Hockey LeagueNational Hockey LeagueThe National Hockey League is an unincorporated not-for-profit association which operates a major professional ice hockey league of 30 franchised member clubs, of which 7 are currently located in Canada and 23 in the United States...
during the league's lockout. The offer was rejected. In June 2005, the company made a revised bid of $4.3 billion for the 30 teams and allow the current owners to maintain a stake in the league. This bid was also rejected. - 2004, Nov – Purchases the DollaramaDollaramaDollarama is a chain of over 690 dollar stores across Canada. The company is headquartered in Montreal and, since 2009, is Canada's largest retailer of items for 2 dollars or less. The first Dollarama store was created at the shopping centre "Les promenades du St-Laurent" in Matane...
chain of dollar storeDollar storeA variety store or price-point retailer is a retail store that sells inexpensive items, often with a single price for all items in the store...
s, based in MontrealMontrealMontreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
, QuebecQuebecQuebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
, CanadaCanadaCanada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and operating stores in the provinces of Eastern CanadaEastern CanadaEastern Canada is generally considered to be the region of Canada east of Manitoba, consisting of the following provinces:* New Brunswick* Newfoundland and Labrador* Nova Scotia* Ontario* Prince Edward Island* Quebec...
for $1.05 billion CADCanadian dollarThe Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
. - 2004, Mar – Acquires Brenntag Group from Deutsche Bahn AG (Exited in 2006; sold to BC PartnersBC PartnersBC Partners is a private equity firm specialising in buyouts and acquisitions financing in Europe and the United States. The firm invests across all industries...
for $4B). - 2003, Nov – Invests in Warner Music GroupWarner Music GroupWarner Music Group is the third largest business group and family of record labels in the recording industry, making it one of the big four record companies...
. - 2003, Aug – Purchases Bombardier Inc.'s recreational products division, along with the Bombardier family and the Caisse de dépôt et placement du QuébecCaisse de dépôt et placement du QuébecThe Caisse de dépôt et placement du Québec manages public pension plans in the Canadian province of Quebec. It was founded in 1965 by an act of the National Assembly...
, and created Bombardier Recreational ProductsBombardier Recreational ProductsBombardier Recreational Products or BRP is a Canadian company that traces its roots back to the year 1942 when Joseph-Armand Bombardier founded L'Auto-Neige Bombardier Limitée in Valcourt in the Eastern Townships, Quebec.In 2003, Bombardier Inc...
or BRP. Bain Capital took a 50% interest in the new company. - 2002, Jul – Acquires Burger KingBurger KingBurger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States. The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain...
in July in a leveraged buyoutLeveraged buyoutA leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
with TPG Capital and Goldman Sachs Capital PartnersGoldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
.
Affiliates
Bain Capital's family of funds includes private equityPrivate equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
, venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
, public equity and leveraged debt assets.
- Absolute Return Capital (ARC) is the absolute return affiliate of Bain Capital managing approximately $600 million of capital. ARC manages assets in fixed incomeFixed incomeFixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
, equity, and commodity markets to produce attractive risk-adjusted returns while maintaining low correlationCorrelationIn statistics, dependence refers to any statistical relationship between two random variables or two sets of data. Correlation refers to any of a broad class of statistical relationships involving dependence....
to traditional investments.
- Bain Capital Private Equity has raised ten funds and invested in more than 200 companies. The private equityPrivate equityPrivate equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
activity includes leveraged buyouts and growth capitalGrowth capitalGrowth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.Companies...
in a wide variety of industries.
- Bain Capital (Europe) Limited, an affiliate of Bain Capital, LLC, is dedicated to investment opportunities in the European market. Based in LondonLondonLondon is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, with an advisory office in MunichMunichMunich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
, Bain Capital has a successful European investment track record dating back to 1989.
- Bain Capital VenturesBain Capital VenturesBain Capital Ventures is the Boston-based venture capital affiliate of Bain Capital. Bain Capital Ventures' history dates back to 1984, with investments in over 110 early and growth stage companies such as Staples, DoubleClick, Aspect Development, Shopping.com, Taleo Corporation, SolarWinds,...
is the venture capitalVenture capitalVenture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
arm of Bain Capital, focused on seed through late-stage growth equity, investing in business services, consumer, healthcare, internet & mobile, and software companies.
- Brookside Capital is the public equity affiliate of Bain Capital. Brookside's primary objective is to invest in securities of publicly traded companies that offer opportunities to realize substantial long-term capital appreciation.
- Sankaty Advisors, the fixed incomeFixed incomeFixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
affiliate of Bain Capital, is one of the nation's leading private managers of high yield debt obligations. With $19.1 billion of committed capital, Sankaty invests in a wide variety of securities, including leveraged loanLeverage (finance)In finance, leverage is a general term for any technique to multiply gains and losses. Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives. Important examples are:* A public corporation may leverage its equity by borrowing money...
s, high-yield bonds, distressed securitiesDistressed securitiesDistressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
, mezzanine debt, convertible bondConvertible bondIn finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
s, structured products and equity investments.
External links
- Bain Capital (company website)
- Bain Capital Ventures
- Warner Music Group