Leonard Green & Partners
Encyclopedia
Leonard Green & Partners is a private equity
firm specializing in leveraged buyout
transactions, particularly of middle market companies. As of 2010, the firm had with approximately $9 billion in assets under management
.
The firm, which was founded in 1989 has approximately 28 employees based in its Los Angeles, California
offices.
As of 2010, Leonard Green had completed investments in 52 companies with aggregate value of $44 billion, since its founding in 1989. Among the firm's historical investments are the following:
and Donaldson, Lufkin & Jenrette
prior to joining the firm).
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
but had to withdraw from the 1987 buyout of insurer Argonaut due to the stock market crash
in that year.
The dissolution of Gibbons Green and the formation of Leonard Green & Partners is primarily attributed to the failure of two buyouts: Ohio Mattress Company
and Sheller-Globe Corporation
.
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 specializing in 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...
transactions, particularly of middle market companies. As of 2010, the firm had with approximately $9 billion in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
.
The firm, which was founded in 1989 has approximately 28 employees based in its Los Angeles, California
Los Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...
offices.
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 IV, LP. 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. At the end of 2007, Leonard Green was ranked #32 among the 50 largest private equity firms globally.As of 2010, Leonard Green had completed investments in 52 companies with aggregate value of $44 billion, since its founding in 1989. Among the firm's historical investments are the following:
- Rite AidRite AidRite Aid is a drugstore chain in the United States and a Fortune 500 company headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S....
, 1999
- Big 5 Sporting GoodsBig 5 Sporting GoodsBig 5 Sporting Goods is a sporting goods retailer headquartered in El Segundo, California with 388 stores in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oklahoma, Oregon, Texas, Utah, Washington and Wyoming. Steven G. Miller is the Chairman, President, and CEO.The Big 5 name is...
, 1992
- PetcoPETCOPETCO is a chain of retail stores that offers pet supplies and services such as grooming and dog training. Founded in 1965 and incorporated in Delaware, it is headquartered in San Diego, California...
, (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.
- Leslie's PoolmartLeslie's PoolmartLeslie's Poolmart, operating as Leslie's Swimming Pool Supplies, is the largest retailer of swimming pool supplies and related products globally. Leslie’s sells the full range of supplies for pool maintenance including chemicals, cleaning devices, equipment and parts as well as recreational and...
, June 1997
- Sports AuthoritySports AuthorityThe Sports Authority, Inc. is one of the largest sporting goods retailers in the United States. It is headquartered in Englewood, Colorado, and operates more than 460 stores in 45 U.S...
, February 2003
- Varsity Brands Inc., April 2003.
- FTD Group, Inc.Florists' Transworld Delivery-Going public:In 1994, FTD began a process of demutualization.On December 19, 1994, a precursor to the FTD Corporation, a private, for-profit company, acquired FTD, which then divided FTD into two organizations: FTD Incorporated, a for profit corporation, and FTD Association, a non-profit trade...
, 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.
- David's BridalDavid's BridalDavid's Bridal is a clothier in the United States that specializes in wedding dresses, prom gowns, and other formal wear. It is the largest American bridal-store chain.David's Bridal currently operates more than 300 stores in 45 states, Canada and Puerto Rico...
, November 2006
- Priscilla of Boston, April 2007
- The Container StoreThe Container StoreThe Container Store is a specialty retail chain that sells storage solutions for home and office.On July 1, 1978, The Container Store opened its doors in a small, retail space in Dallas...
, July 2007
- Whole Foods MarketWhole Foods MarketWhole Foods Market is a foods supermarket chain based in Austin, Texas which emphasizes "natural and organic products." The company has been ranked among the most socially responsible businesses and placed third on the U.S...
, November 2008
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 LambertDrexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
and Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette or DLJ is a defunct U.S. investment bank founded by William H. Donaldson, Richard Jenrette and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research;...
prior to joining the firm).
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 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...
and management buyout
Management buyout
A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.- Overview :Management buyouts are similar in all major legal aspects to any other acquisition of a company...
. Among its most notable transactions were the purchase of Budget Rent a Car
Budget Rent a Car
Budget Rent a Car System, Inc. is an American car rental company that was founded in 1958 in Los Angeles, California by Morris Mirkin. Budget's operations are headquartered in Parsippany-Troy Hills Township, New Jersey....
(1986) from Transamerica
Transamerica
Transamerica or Transamerican may refer to:*Transamerica Corporation**The Transamerica Pyramid in San Francisco*TransAmerica , a railroad boardgame*Transamerica , a 2005 film**Transamerica...
in 1986 as well as the acquisition of Kash n' Karry Food Stores. The firm completed the 1982 buyout of Purex Industries
Purex (Laundry detergent)
Purex is the brand name of a popular laundry detergent in the United States, Canada and other countries. It is manufactured by the US-based Dial Corporation division of Germany's Henkel Corporation. Purex is one of the most widely used laundry detergents in North America...
but had to withdraw from the 1987 buyout of insurer Argonaut due to the stock market crash
Black Monday (1987)
In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin...
in that year.
The dissolution of Gibbons Green and the formation of Leonard Green & Partners is primarily attributed to the failure of two buyouts: Ohio Mattress Company
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 :...
and Sheller-Globe Corporation
Sheller-Globe Corporation
Sheller-Globe Corporation was a U.S. auto parts manufacturer and industrial conglomerate based in Toledo, Ohio. Formed in 1966 on a heritage of much older companies, Sheller-Globe grew through the acquisition of many other businesses before it was acquired by United Technologies Corporation in...
.
- Ohio Mattress CompanySealy CorporationSealy 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 :...
– 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 BostonFirst BostonFirst Boston Corporation was a New York-based, bulge bracket, investment bank, founded in 1932 and acquired by Credit Suisse in 1990. Together with its sister investment banks, it was referred to as CS First Boston after 1993 and part of Credit Suisse First Boston after 1996, the First Boston part...
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 SuisseCredit SuisseThe Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
, leading subsequently to the takeover of First Boston and the formation of CS First Boston. The incident became known as "The Burning Bed" and ultimately Gibbons Green was forced to offer a significant equity stake in the company in order to secure financing.
- Sheller-Globe CorporationSheller-Globe CorporationSheller-Globe Corporation was a U.S. auto parts manufacturer and industrial conglomerate based in Toledo, Ohio. Formed in 1966 on a heritage of much older companies, Sheller-Globe grew through the acquisition of many other businesses before it was acquired by United Technologies Corporation in...
– Gibbons, Green bought Sheller-Globe jointly with United Technologies from Knoll InternationalKnoll (company)Knoll is a design firm that produces office systems, seating, files and storage, tables and desks, textiles , and accessories for office and for the home. The company also manufactures furniture for the home by Ludwig Mies van der Rohe, Harry Bertoia, Florence Knoll , Frank Gehry, Maya Lin and...
. 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.
External links
- Leonard Green & Partners (Official Website)