J.W. Childs Associates
Encyclopedia
J.W. Childs Associates is a private equity
firm focused on leveraged buyout
and recapitalization
transactions for middle-market growth companies. JWC places particular emphasis on consumer products, healthcare and specialty retail companies.
The firm is headquartered in Boston, Massachusetts and was founded in 1995 by longtime buyout investor John W. Childs, who had previously been the number two partner at large-cap Boston-based private equity firm Thomas H. Lee Partners
.
investor John W. Childs after a split from Thomas H. Lee
. Prior to founding J.W. Childs Associates, from 1987 through 1995 Childs had been a managing director and subsequently the senior managing director of Thomas H. Lee Partners
(THL). While at THL, Childs had helped negotiate the buyouts of Snapple Beverages and Ghirardelli Chocolate Company
, along with others of the firm's largest investmeents. From 1971 through 1987, Childs had held various investment positions at the Prudential Insurance Company of America
.
J.W. Childs completed a number of large leveraged buyout
s including takeover
s of several of the following notable companies: Nutrasweet
, Chevy's, Empire Kosher
, Equinox Fitness
, South Beach Beverage Company and Edison Schools
.
Additionally, the firm has raised approximately $3.1 billion of investor commitments in three private equity fund
s:
The firm began "premarketing" its fourth private equity fund
in early 2006, with a target size of $2.5 billion. However, in mid-2007, J.W. Childs decided to postpone the fundraising process because institutional investor
s were proving less receptive to the offering than had been expected. Performance at two of the firm's previous funds was below median for their respective vintage years and many investment professionals resigned from the firm. Additionally, the fundraising environment for private equity firms became increasingly difficult with the onset of the 2007-2008 credit crunch
.
In March 2008, following the failed fundraising for JW Childs Equity Partners IV, JWC registered with the Securities and Exchange Commission for a $200 million IPO of J.W. Childs Acquisition I Corp., a publicly traded special purpose acquisition company
(SPAC). Several "fallen" buyout professionals have pursued SPACs (most notably Thomas O. Hicks, formerly of Hicks Muse Tate & Furst) to raise capital when the more common institutional market
is unreceptive.
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 focused on leveraged buyout
Leveraged buyout
A 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...
and recapitalization
Leveraged recapitalization
In corporate finance, a leveraged recapitalization is a change of the capital structure of a company, a substitution of equity for debt —e.g. by issuing bonds to raise money, and using that money to buy the company's stock or to pay dividends...
transactions for middle-market growth companies. JWC places particular emphasis on consumer products, healthcare and specialty retail companies.
The firm is headquartered in Boston, Massachusetts and was founded in 1995 by longtime buyout investor John W. Childs, who had previously been the number two partner at large-cap Boston-based private equity firm Thomas H. Lee Partners
Thomas H. Lee Partners
Thomas H. Lee Partners is a private equity firm based in Boston, Massachusetts specializing in leveraged buyouts, growth capital, special situations, industry consolidations, and recapitalizations....
.
History
The firm was founded in 1995 by long-time leveraged buyoutLeveraged buyout
A 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...
investor John W. Childs after a split from Thomas H. Lee
Thomas H. Lee
Thomas H. Lee is an American businessman, financier and investor and is credited with being one of the early pioneers in private equity and specifically leveraged buyouts. Thomas H. Lee Partners , the firm he founded in 1974, is among the oldest and largest private equity firms globally...
. Prior to founding J.W. Childs Associates, from 1987 through 1995 Childs had been a managing director and subsequently the senior managing director of Thomas H. Lee Partners
Thomas H. Lee Partners
Thomas H. Lee Partners is a private equity firm based in Boston, Massachusetts specializing in leveraged buyouts, growth capital, special situations, industry consolidations, and recapitalizations....
(THL). While at THL, Childs had helped negotiate the buyouts of Snapple Beverages and Ghirardelli Chocolate Company
Ghirardelli Chocolate Company
The Ghirardelli Chocolate Company is a United States division of Swiss candymaker Lindt & Sprüngli. The company was founded by and is named after Italian chocolatier Domingo Ghirardelli, who, after working in South America, moved to California...
, along with others of the firm's largest investmeents. From 1971 through 1987, Childs had held various investment positions at the Prudential Insurance Company of America
Prudential Financial
The Prudential Insurance Company of America , also known as Prudential Financial, Inc., is a Fortune Global 500 and Fortune 500 company whose subsidiaries provide insurance, investment management, and other financial products and services to both retail and institutional customers throughout the...
.
J.W. Childs completed a number of large leveraged buyout
Leveraged buyout
A 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...
s including takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
s of several of the following notable companies: Nutrasweet
NutraSweet
The NutraSweet Company makes and sells NutraSweet, their trademarked brand name for the artificial sweetener aspartame, and Neotame.Aspartame was accidentally discovered in 1965 by James M. Schlatter, a chemist with a master's degree working under Dr. Kurt Rorig, PhD, in charge of new drug research...
, Chevy's, Empire Kosher
Empire Kosher
Empire Kosher Poultry, Inc. is the largest producer of kosher poultry in the United States. The company's headquarters, hatchery and processing facility are located in Mifflintown, Pennsylvania.-Early years:...
, Equinox Fitness
Equinox Fitness
Equinox Fitness is a luxury fitness company with its national headquarters in New York. Equinox operates three separate fitness brands: Equinox Fitness, PURE Yoga and Blink Fitness. Equinox is a subsidiary of The Related Companies, one of the largest real estate development and property management...
, South Beach Beverage Company and Edison Schools
Edison Schools
EdisonLearning Inc., formerly known as Edison Schools Inc., is a for-profit education management organization for public schools in the United States and the United Kingdom. It was founded in 1992 as The Edison Project, largely the brainchild of Chris Whittle...
.
Additionally, the firm has raised approximately $3.1 billion of investor commitments in three private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s:
- JW Childs Equity Partners (1995) - $352 million
- JW Childs Equity Partners II (1998) - $983 million
- JW Childs Equity Partners III (2002) - $1.75 billion
- JW Childs Equity Partners IV – failed fundraising in 2007 ($2.5 billion target)
The firm began "premarketing" its fourth private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
in early 2006, with a target size of $2.5 billion. However, in mid-2007, J.W. Childs decided to postpone the fundraising process because institutional investor
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s were proving less receptive to the offering than had been expected. Performance at two of the firm's previous funds was below median for their respective vintage years and many investment professionals resigned from the firm. Additionally, the fundraising environment for private equity firms became increasingly difficult with the onset of the 2007-2008 credit crunch
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
.
In March 2008, following the failed fundraising for JW Childs Equity Partners IV, JWC registered with the Securities and Exchange Commission for a $200 million IPO of J.W. Childs Acquisition I Corp., a publicly traded special purpose acquisition company
Special purpose acquisition company
A special-purpose acquisition company is a collective investment scheme that allows public stock market investors to invest in private equity type transactions, particularly leveraged buyouts...
(SPAC). Several "fallen" buyout professionals have pursued SPACs (most notably Thomas O. Hicks, formerly of Hicks Muse Tate & Furst) to raise capital when the more common institutional market
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
is unreceptive.
External links
- J.W. Childs Associates (company website)