From Wikipedia, the free encyclopedia
This article is about the investment firm. For the management consulting company, see
Bain & Company.
Bain Capital LLCD
 |
| Type |
Private, LLC |
| Industry |
Private equity |
| Founded |
1984 |
| Founder(s) |
Bill Bain[1]
Mitt Romney
T. Coleman Andrews III
Eric Kriss
John Halpern |
| Headquarters |
200 Clarendon Street
Boston, Massachusetts, U.S. |
| Number of locations |
Boston, Chicago, New York, Palo Alto, London, Luxembourg, Munich, Hong Kong, Shanghai, Mumbai, and Tokyo |
| Key people |
Joshua Bekenstein, John Connaughton, Paul Edgerley, Mark Nunnelly, Stephen Pagliuca, Jordan Hitch, Matthew Levin |
| Products |
Venture capital, investment management, public equity, high-yield assets, Mezzanine capital, leveraged buyouts and growth capital |
| Total assets |
 US$ 66 billion (2012) |
| Employees |
400+ (2012)[2] |
| Website |
www.baincapital.com |
Bain Capital is an American alternative
asset management and
financial services company based in
Boston, Massachusetts. It specializes in
private equity,
venture capital,
credit and
public market
investments. Bain invests across a broad range of industry sectors and
geographic regions. As of early 2012, the firm managed approximately $66
billion of investor capital across its various investment platforms.
The firm was founded in 1984 by partners from the consulting firm
Bain & Company. Since inception it has invested in or acquired hundreds of companies including
AMC Entertainment,
Aspen Education Group,
Brookstone,
Burger King,
Burlington Coat Factory,
Clear Channel Communications,
Domino's Pizza,
DoubleClick,
Dunkin' Donuts,
D&M Holdings,
Guitar Center,
Hospital Corporation of America (HCA),
Sealy,
The Sports Authority,
Staples,
Toys "R" Us,
Warner Music Group and
The Weather Channel.
As of the end of 2011, Bain Capital had approximately 400
professionals, most with previous experience in consulting, operations
or finance.
[2] Bain is headquartered at the
John Hancock Tower in
Boston, Massachusetts with additional offices in
New York City,
Chicago,
Palo Alto,
London,
Luxembourg,
Munich,
Hong Kong,
Shanghai,
Mumbai, and
Tokyo.
The company, and its actions during its first 15 years, became the
subject of political and media scrutiny as a result of co-founder
Mitt Romney's later political career, especially
his 2012 presidential campaign.
[4][5]
History
1984 founding and early history
Bain Capital was founded in 1984 by
Bain & Company partners
Mitt Romney, T. Coleman Andrews III, and
Eric Kriss, after
Bill Bain
had offered Romney the chance to head a new venture that would invest
in companies and apply Bain's consulting techniques to improve
operations.
[6] In addition to the three founding partners, the early team included
Fraser Bullock,
Robert F. White,
Joshua Bekenstein, Adam Kirsch, and
Geoffrey S. Rehnert.
[7] Romney initially had the titles of president
[8] and managing general partner
[9][10] or managing partner.
[11] He later became referred to as managing director
[12] or CEO
[13] as well. He was also the sole shareholder of the firm.
[14] At the beginning, the firm had fewer than ten employees.
[15] When new employees were hired, they were generally in their twenties and top-ranked graduates from
Stanford University or
Harvard University, both of which Romney had attended.
[16]
In the face of skepticism from potential investors, Romney and his
partners spent a year raising the $37 million in funds needed to start
the new operation.
[15][17][18][19] Bain partners put in $12 million of their own money and sourced the rest from wealthy individuals.
[20] Early investors included Boston real estate mogul
Mortimer Zuckerman and
Robert Kraft, the owner of the New England Patriots football team.
[18] They also included members of elite Salvadoran families who fled the country's
civil war.
[21] They and other wealthy Latin Americans invested $9 million primarily through
offshore companies registered in
Panama.
[20]
While Bain Capital was founded by Bain executives, the firm was not
an affiliate or a division of Bain & Company but rather a completely
separate company. Initially, the two firms shared the same offices - in
an office tower at
Copley Place in Boston
[22]
- and a similar approach to improving business operations. However, the
two firms had put in place certain protections to avoid sharing
information between the two companies and the Bain & Company
executives had the ability to veto investments that posed potential
conflicts of interest.
[23]
Bain Capital also provided an investment opportunity for partners of
Bain & Company. The firm initially gave a cut of its profits to Bain
& Company, but Romney later persuaded Bill Bain to give that up.
[24]
The Bain Capital team was initially reluctant to invest its capital.
By 1985, things were going poorly enough that Romney considered closing
the operation, returning investors' money back to them, and having the
partners go back to their old positions.
[25] The partners saw weak spots in so many potential deals that by 1986, very few had been done.
[26] At first, Bain Capital focused on
venture capital opportunities.
[26] One of Bain's earliest and most notable venture investments was in
Staples, Inc., the
office supply retailer. In 1986, Bain provided $4.5 million to two supermarket executives, Leo Kahn and
Thomas G. Stemberg, to open an office supply supermarket in
Brighton, Massachusetts.
[27] The fast-growing retail chain went public in 1989;
[28] by 1996, the company had grown to over 1,100 stores,
[29]
and as of fiscal year end January 2012, Staples reached over $20
billion in sales, nearly $1.0B in net income, 87,000 employees, and
2,295 stores.
[30]
Bain Capital eventually reaped a nearly sevenfold return on its
investment, and Romney sat on the Staples board of directors for over a
decade.
[15][19][26]
Another very successful investment occurred in 1986 when $1 million was
invested in medical equipment maker Calumet Coach, which eventually
returned $34 million.
[31] A few years later, Bain Capital made an investment in the technology research outfit the
Gartner Group, which ended up returning a 16-fold gain.
[31]
Bain invested the $37 million of capital in its first fund in twenty
companies and by 1989 was generating an annualized return in excess of
50 percent. By the end of the decade, Bain's second fund, raised in 1987
had deployed $106 million into 13 investments.
[32]
As the firm began organizing around funds, each such fund was run by a
specific general partnership – that included all Bain Capital executives
as well as others – which in turn was controlled by Bain Capital Inc.,
the management company that Romney had full ownership control of.
[33] As CEO, Romney had the final say in every deal made.
[34]
1990s
Beginning in 1989, the firm, which began as a
venture capital source investing in
start-up companies, adjusted its strategy to focus on
leveraged buyouts and
growth capital investments in more mature companies.
[35]
Their model was to buy existing firms with money mostly borrowed
against their assets, partner with existing management to apply Bain
methodology to their operations (rather than the hostile takeovers
practiced in other leverage buyout scenarios), and sell them off in a
few years.
[18][26] Existing CEOs were offered large equity stakes in the process, owing to Bain Capital's belief in the emerging
agency theory that CEOs should be bound to maximizing
shareholder value rather than other goals.
[19] By the end of 1990, Bain had raised $175 million of capital and financed 35 companies with combined revenues of $3.5 billion.
[36]
In July 1992, Bain acquired
Ampad (originally American Pad & Paper) from
Mead Corporation,
which had acquired the company in 1986. Mead, which had been
experiencing difficulties integrating Ampad's products into its existing
product lines, generated a cash gain of $56 million on the sale.
[37]
Under Bain's ownership, the company enjoyed a significant growth in
sales from $106.7 million in 1992 to $583.9 million in 1996, when the
company was listed on the
New York Stock Exchange. Under Bain's ownership, the company also made a number of acquisitions, including writing products company
SCM
in July 1994, brand names from the American Trading and Production
Corporation in August 1995, WR Acquisition and the Williamhouse-Regency
Division of Delaware, Inc. in October, 1995, Niagara Envelope Company,
Inc. in 1996, and Shade/Allied, Inc. in February 1997.
[38]
Ampad's revenue began to decline in 1997 and the company laid off
employees and closed production facilities to maintain profitability.
Employment declined from 4,105 in 1996 to 3,800 in 2000.
[39] The company ceased trading on the New York stock exchange on December 22, 2000
[40]
and filed for bankruptcy in 2001. At the time of the bankruptcy, Bain
Capital held a 34.9% equity ownership interest in the company.
[41] The assets were acquired in 2003 by
Crescent Investments.
Bain's eight years' of involvement in Ampad is estimated to have
generated over $100 million in profits ($60 million in dividends, $45–50
million from the proceeds from stock issued after the company went
public, and $1.5-2 million in annual management fees).
[42]
In 1994, Bain acquired
Totes, a producer of umbrellas and overshoes.
[43] Three years later, Totes, under Bain’s ownership, acquired Isotoner, a producer of leather gloves.
[44]
Bain, together with
Thomas H. Lee Partners, acquired
Experian, the consumer credit reporting business of
TRW Inc.,
in 1996 for more than $1 billion. Formerly known as TRW's Information
Systems and Services unit, Experian is one of the leading providers of
credit reports on consumers and businesses in the US.
[45] The company was sold to
Great Universal Stores for $1.7 billion just months after being acquired.
[46] Other notable Bain investments of the late 1990s included
Sealy Corporation, the manufacturer of mattresses;
[47] Alliance Laundry Systems;
[48] Domino's Pizza[49] and Artisan Entertainment.
[50]
Much of the firm's profits was earned from a relatively small number
of deals, with Bain Capital's overall success and failure rate being
about even. One study of 68 deals that Bain Capital made up through the
1990s found that the firm lost money or broke even on 33 of them.
[51]
Another study that looked at the eight-year period following 77 deals
during the same time found that in 17 cases the company went bankrupt or
out of business, and in 6 cases Bain Capital lost all its investment.
But 10 deals were very successful and represented 70 percent of the
total profits.
[52]
Romney had two diversions from Bain Capital during the first half of the decade. From January 1991 to December 1992,
[26][53] Romney served as the CEO of
Bain & Company
where he led the successful turnaround of the consulting firm (he
remained managing general partner of Bain Capital during this time).
[9][10] In November 1993, he took a leave of absence for his unsuccessful
1994 run for the U.S. Senate seat from Massachusetts; he returned the day after the election in November 1994.
[26][54][55]
During that time, Ampad workers went on strike, and asked Romney to
intervene; Bain Capital lawyers asked him not to get involved, although
he did meet with the workers to tell them he had no position of active
authority in the matter.
[56][57]
In 1994, Bain invested in
Steel Dynamics, based in
Fort Wayne, Indiana,
a prosperous steel company that has grown to the fifth largest in the
U.S.A, employs about 6,100 people, and produces carbon steel products
with 2010 revenues of $6.3 billion on steel shipments of 5.3 million
tons.
[58] In 1993, Bain acquired the
Armco Worldwide Grinding System steel plant in
Kansas City, Missouri and merged it with its steel plant in
Georgetown, South Carolina to form
GST Steel.
The Kansas City plant had a strike in 1997 and Bain closed the plant in
2001 laying off 750 workers when it went into bankruptcy. The South
Carolina plant closed in 2003 but subsequently reopened under a
different owner. At the time of its bankruptcy it reported $553.9
million in debts against $395.2 in assets. Bain reported $58.4 million
in profits, the employee pension fund had a liability of $44 million.
[59][60][61][62]
Bain's investment in
Dade Behring represented a significant investment in the
medical diagnostics industry. In 1994, Bain, together with
Goldman Sachs Capital Partners completed a carveout acquisition of Dade International,
[63] the medical diagnostics division of
Baxter International in a $440 million acquisition. Dade's private equity owners merged the company with DuPont's
in vitro diagnostics business in May 1996 and subsequently with the Behring Diagnostics division of
Hoechst AG in 1997.
[64] Aventis, the successor of Hoechst, acquired 52% of the combined company.
[65] In 1999, the company reported $1.3 billion of revenue and completed a $1.25 billion
leveraged recapitalization that resulted in a payout to shareholders.
[64]
The dividend, taken together with other previous shareholder dividends
resulted in an eightfold return on investment to Bain Capital and
Goldman Sachs.
[31][52]
Revenues declined from 1999 through 2002 and despite attempts to cut
costs through layoffs the company entered into bankruptcy in 2002.
Following its restructuring, Dade Behring emerged from Bankruptcy in
2003 and continued to operate independently until 2007 when the business
was acquired by
Siemens Medical Solutions. Bain and Goldman lost their remaining stock in the company as part of the bankruptcy.
[66]
By the end of the decade, Bain Capital was on its way to being one of the top private equity firms in the nation,
[24] having increased its number of partners from 5 to 18, having 115 employees overall, and having $4 billion under its management.
[15][18] The firm's average annual return on investments was 113 percent.
[17][67] It had made between 100 and 150 deals where it acquired and then sold a company.
[31][51][52]
1999–2002: Romney departure and political legacy
Romney took a paid leave of absence from Bain Capital in February 1999 when he became the head of the
Salt Lake Organizing Committee for the
2002 Winter Olympics.
[68][69] The decision caused turmoil at Bain Capital, with a power struggle ensuing.
[70] Some partners left and founded the
Audax Group and
Golden Gate Capital.
[34] Other partners threatened to leave, and there was a prospect of eight-figure lawsuits being filed.
[70] Romney was worried that the firm might be destroyed, but the crisis ebbed.
[70]
Romney was not involved in day-to-day operations of the firm after starting the Olympics position.
[71][72] Those were handled by a management committee, consisting of five of the fourteen remaining active partners with the firm.
[34] However, according to some interviews and press releases during 1999, Romney said he was keeping a part-time function at Bain.
[34][73]
During his leave of absence, Romney continued to be listed in filings to the
U.S. Securities and Exchange Commission[74] as "sole shareholder, sole director, Chief Executive Officer and President".
[75][76] The SEC filings reflected the legal reality
[77] and the ownership interest in the Bain Capital management company.
[33][78] In practice, former Bain partners have stated that Romney's attention was mostly occupied by his Olympics position.
[77][79]
He did stay in regular contact with his partners, and traveled to meet
with them several times, signing corporate and legal documents and
paying attention to his own interests within the firm and to his
departure negotiations.
[78]
Bain Capital Fund VI in 1998 was the last one Romney was involved in;
investors were worried that with Romney gone, the firm would have
trouble raising money for Bain Capital Fund VII in 2000, but in practice
the $2.5 billion was raised without much trouble.
[34] His former partners have said that Romney had no role in assessing other new investments after February 1999,
[34] nor was he involved in directing the company’s investment funds.
[33]
Discussions over the final terms of Romney's departure dragged on
during this time, with Romney negotiating for the best deal he could get
and his continuing position as CEO and sole shareholder giving him the
leverage to do so.
[34][77]
Although he had left open the possibility of returning to Bain after
the Olympics, Romney made his crossover to politics permanent with an
announcement in August 2001.
[68] His separation from the firm was finalized in early 2002.
[34][80] Romney negotiated a ten-year retirement agreement with Bain Capital
[34]
that allowed him to receive a passive profit share and interest as a
retired partner in some Bain Capital entities, including buyout and Bain
Capital investment funds, in exchange for his ownership in the
management company.
[81][82] Because the private equity business continued to thrive, this deal would bring him millions of dollars in annual income.
[82]
Romney was the first and last CEO of Bain Capital; since his departure
became final, it has continued to be run by management committee.
[34]
Bain Capital itself, and especially its actions and investments
during its first 15 years, came under press scrutiny as the result of
Romney's
2008 and
2012 presidential campaigns.
[31][83][84]
Bain Capital made as few comments about those actions and investments
as possible, as even by the standards of the private equity industry it
was known for its commitment towards secrecy about itself and privacy
for its clients and investors.
[84] Romney's leave of absence and the level of activity he had within the firm during the 1999-2002 period also garnered attention.
[85][86][87][88][89][90]
Early 2000s
Bain Capital began the new decade by closing on its seventh fund,
Bain Capital Fund VII, with over $3.1 billion of investor commitments.
The firm's most notable investments in 2000 included the $700 million
acquisition of
Datek, the online stock brokerage firm,
[91] as well as the $305 million acquisition of
KB Toys from
Consolidated Stores.
[92] Datek was ultimately merged with
Ameritrade
in 2002. KB Toys, which had been financially troubled since the 1990s
as a result of increased pressure from national discount chains such as
Wal-Mart and
Target, filed for
Chapter 11 bankruptcy protection in January 2004. Bain had been able to recover value on its investment through a
dividend recapitalization in 2003.
[93] In early 2001, Bain agreed to purchase a 30 percent stake, worth $600 million, in
Huntsman Corporation, a leading chemical company owned by
Jon Huntsman, Sr., but the deal was never completed.
[94][95]
With a significant amount of committed capital in its new fund
available for investment, Bain was one of a handful of private equity
investors capable of completing large transactions in the adverse
conditions of the
early 2000s recession. In July 2002, Bain together with
TPG Capital and
Goldman Sachs Capital Partners, announced the high profile $2.3 billion leveraged buyout of
Burger King from
Diageo.
[96]
However, in November the original transaction collapsed, when Burger
King failed to meet certain performance targets. In December 2002, Bain
and its co-investors agreed on a reduced $1.5 billion purchase price for
the investment.
[97]
The Bain consortium had support from Burger King's franchisees, who
controlled approximately 92% of Burger King restaurants at the time of
the transaction. Under its new owners, Burger King underwent a major
brand overhaul including the use of
The Burger King character in advertising. In February 2006, Burger King announced plans for an
initial public offering.
[98]
In late 2002, Bain remained active acquiring
Houghton Mifflin Company for $1.28 billion, together with
Thomas H. Lee Partners and
The Blackstone Group. Houghton Mifflin and Burger King represented two of the first large
club deals, completed since the collapse of the
Dot-com bubble.
[99]
In November 2003, Bain completed an investment in
Warner Music Group. In 2004 Bain acquired the
Dollarama chain of
dollar stores, based in
Montreal,
Quebec,
Canada and operating stores in the provinces of
Eastern Canada for $1.05 billion
CAD. In March 2004, Bain acquired Brenntag Group from Deutsche Bahn AG (Exited in 2006; sold to
BC Partners for $4B). In August 2003, Bain acquired a 50% interest in
Bombardier Inc.'s recreational products division, along with the Bombardier family and the
Caisse de dépôt et placement du Québec, and created
Bombardier Recreational Products or BRP.
Bain and the 2000s buy-out boom
Bain led a consortium in the buyout of
Toys "R" Us in 2004
In 2004 a
consortium comprising KKR, Bain Capital and real estate development company
Vornado Realty Trust announced the $6.6 billion acquisition of
Toys "R" Us, the toy retailer. A month earlier,
Cerberus Capital Management, made a $5.5 billion offer for both the toy and baby supplies businesses.
[100] The Toys 'R' Us buyout was one of the largest in several years.
[101]
Following this transaction, by the end of 2004 and in 2005, major
buyouts were once again becoming common and market observers were
stunned by the leverage levels and financing terms obtained by financial
sponsors in their buyouts.
[102]
The following year, in 2005, Bain was one of seven private equity firms involved in the buyout of
SunGard in a transaction valued at $11.3 billion. Bain's partners in the acquisition were
Silver Lake Partners,
TPG Capital,
Goldman Sachs Capital Partners,
Kohlberg Kravis Roberts,
Providence Equity Partners, and
The Blackstone Group. This represented the largest leveraged buyout completed since the takeover of
RJR Nabisco
at the end of the 1980s leveraged buyout boom. Also, at the time of its
announcement, SunGard would be the largest buyout of a technology
company in history, a distinction it would cede to the buyout of
Freescale Semiconductor. The SunGard transaction is also notable in the number of firms involved in the transaction, the largest
club deal
completed to that point. The involvement of seven firms in the
consortium was criticized by investors in private equity who considered
cross-holdings among firms to be generally unattractive.
[103][104]
Bain led a consortium, together with
The Carlyle Group and
Thomas H. Lee Partners to acquire
Dunkin' Brands. The private equity firms paid $2.425 billion in cash for the parent company of
Dunkin' Donuts and
Baskin-Robbins in December 2005.
[105]
In 2006, Bain Capital and
Kohlberg Kravis Roberts, together with
Merrill Lynch and the Frist family (which had founded the company) completed a $31.6 billion acquisition of
Hospital Corporation of America,
17 years after it was taken private for the first time in a management
buyout. At the time of its announcement, the HCA buyout would be the
first of several to set new records for the largest buyout, eclipsing
the 1989 buyout of
RJR Nabisco. It would later be surpassed by the buyouts of
Equity Office Properties and
TXU.
[106] In August 2006, Bain was part of the
consortium, together with
Kohlberg Kravis Roberts,
Silver Lake Partners and
AlpInvest Partners, that acquired a controlling 80.1% share of semiconductors unit of
Philips for €6.4 billion. The new company, based in the Netherlands, was renamed
NXP Semiconductors.
[107][108]
During the buyout boom, Bain was active in the acquisition of various retail businesses.
[109] In January 2006, Bain announced the acquisition of
Burlington Coat Factory, a discount retailer operating 367 department stores in 42 states, in a $2 billion buyout transaction.
[110] Six months later, in October 2006, Bain and
The Blackstone Group acquired
Michaels Stores,
the largest arts and crafts retailer in North America in a $6.0 billion
leveraged buyout. Bain and Blackstone narrowly beat out
Kohlberg Kravis Roberts and
TPG Capital in an auction for the company.
[111] In June 2007, Bain agreed to acquire
HD Supply, the wholesale construction supply business of
Home Depot for $10.3 billion.
[112] Bain, along with partners
Carlyle Group and
Clayton, Dubilier & Rice, would later negotiate a lower price ($8.5 billion) when the initial stages of the
subprime mortgage crisis caused lenders to seek to renegotiate the terms of the acquisition financing.
[113] Just days after the announcement of the HD Supply deal, on June 27, Bain announced the acquisition of
Guitar Center,
the leading musical equipment retailer in the U.S. Bain paid $1.9
billion, plus $200 million in assumed debt, representing a 26% premium
to the stock's closing price prior to the announcement.
[114] Bain also acquired
Edcon Limited, which operates Edgars Department Stores in South Africa and Zimbabwe for 25 billion-rand ($3.5 billion) in February 2007.
[115]
Other investments during the buyout boom included:
Bavaria Yachtbau, acquired for €1.3 billion in July 2007
[116] as well as Sensata Technologies, acquired from
Texas Instruments in 2006 for approximately $3 billion.
[117]
Since 2008
In the wake of the closure of the credit markets in 2007 and 2008,
Bain managed to close only a small number of sizable transactions. In
July 2008, Bain, together with
NBC Universal and
The Blackstone Group agreed to purchase
The Weather Channel from
Landmark Communications.
[118][119]
Subsequent investments include, but are not limited to:
Businesses and affiliates
Bain Capital's family of funds includes
private equity,
venture capital,
public equity, and
leveraged debt assets.
Bain Capital Private Equity
Bain Capital Private Equity has raised ten funds and invested in more than 250 companies. The
private equity activity includes
leveraged buyouts and
growth capital in a wide variety of industries.
[129] Bain began investing in Europe in 1989 through its
London-based affiliate Bain Capital Europe.
[130] Bain also operates international affiliates Bain Capital Asia and Bain Capital India.
Bain Capital Private Equity is made up of more than 250 investment
professionals, including 38 managing directors operating from offices in
Boston, Hong Kong, London, Mumbai, Munich, New York, Shanghai, and
Tokyo, as of the beginning of 2011.
Historically, Bain has primarily relied on
private equity funds, pools of committed capital from
pension funds,
insurance companies,
endowments,
fund of funds,
high net worth individuals,
sovereign wealth funds and other
institutional investors.
Bain's own investment professionals are the largest single investor in
each of its funds. From 1993, when Bain raised its first institutional
fund through the beginning of 2012, Bain had completed fundraising for
11 funds with total investor commitments of over $38 billion, including
its global private equity funds and separate funds focusing specifically
on investments in Europe and Asia. Since 1998, each of Bain's global
funds has invested alongside a
coinvestment fund that invests only in certain larger transactions. The following is a summary of Bain's
private equity funds raised from its inception through the beginning of 2012:
[131]
| Fund |
Vintage
Year |
Committed
Capital ($m) |
| Bain Capital Fund IV |
1993 |
$300 |
| Bain Capital Fund V |
1995 |
$500 |
| Bain Capital Fund VI |
1998 |
$1,400[132] |
| Bain Capital Fund VII |
2000 |
$3,117[132] |
| Bain Capital Fund VIII |
2004 |
$4,250[132] |
| Bain Capital Fund VIII-E (Europe) |
2004 |
$1,015 |
| Bain Capital Fund IX |
2006 |
$10,000[132] |
| Bain Capital Europe III |
2008 |
€ 3,500 |
| Bain Capital Asia |
2008 |
$1,000 |
| Bain Capital Fund X |
2008 |
$11,800[132] |
| Bain Capital Asia II |
2011 |
$2,000 |
Bain Capital Ventures
Bain Capital Ventures is the
venture capital
arm of Bain Capital, focused on seed through late-stage growth equity,
investing in business services, consumer, healthcare, internet &
mobile, and software companies. Bain Capital Ventures has raised
approximately $1.53 billion of investor capital since 2001 across four
investment funds. The firm's 30 investment professionals are currently
investing its fourth fund, Bain Capital Venture Fund 2009, which raised
$525 million from investors.
[133]
The following is a summary of Bain's
private equity funds raised from its inception through the beginning of 2012:
[131]
| Fund |
Vintage
Year |
Committed
Capital ($m) |
| Bain Capital Venture Fund |
2001 |
$250 |
| Bain Capital Venture Partners 2005 |
2005 |
$250 |
| Bain Capital Venture Partners 2007 |
2007 |
$500 |
| Bain Capital Venture Partners 2009 |
2009 |
$525 |
| Bain Capital Venture Partners 2012 |
2012 |
$600[134] |
Since 2001, Bain Capital Ventures' most notable investments include
DoubleClick,
LinkedIn,
[135] Shopping.com,
Taleo Corporation,
MinuteClinic and
SurveyMonkey.
[136]
Brookside Capital
Brookside Capital is the
public equity affiliate
of Bain Capital. Established in October 1996, Brookside's primary
objective is to invest in securities of publicly traded companies that
offer opportunities to realize substantial long-term
capital appreciation. Brookside employs a
long/short equity strategy to reduce market risk in the portfolio
[137]
Sankaty Advisors
Sankaty Advisors, the
fixed income affiliate of Bain Capital, is one of the nation's leading private managers of
high yield debt securities. With $15.7 billion of assets under management, Sankaty invests in a wide variety of securities, including
leveraged loans,
high-yield bonds,
distressed securities,
mezzanine debt,
convertible bonds,
structured products and
equity investments.
Sankaty has approximately 140 employees, including 80 investment
professionals across offices in Boston, Chicago, New York and London.
[138]
Absolute Return Capital
Absolute Return Capital (ARC) is the absolute return affiliate of
Bain Capital managing approximately $1.2 billion of capital.
Approximately one-third of the capital managed by ARC represents
commitments from Bain investment professionals. Established in May 2004,
ARC invests across
fixed income,
equity and
commodity markets to produce attractive risk-adjusted returns while maintaining low
correlation to traditional investments.
[139]
Appraisals and critiques
Bain Capital's approach of applying consulting expertise to the
companies it invested in became widely copied within the private equity
industry.
[15][140] University of Chicago Booth School of Business economist
Steven Kaplan said in 2011 that the firm "came up with a model that was very successful and very innovative and that now everybody uses."
[19]
In his 2009 book
The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy,
Josh Kosman described Bain Capital as "notorious for its failure to
plow profits back into its businesses," being the first large
private-equity firm to derive a large fraction of its revenues from
corporate dividends and other distributions. The revenue potential of
this strategy, which may "starve" a company of capital,
[141]
was increased by a 1970s court ruling that allowed companies to
consider the entire fair-market value of the company, instead of only
their "hard assets", in determining how much money was available to pay
dividends.
[142]
In at least some instances, companies acquired by Bain borrowed money
in order to increase their dividend payments, ultimately leading to the
collapse of what had been financially stable businesses.
[55]
Investments gallery
| Selected Bain Capital investments |
|
|
References
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- ^ Fifield, Anna; McGregor, Richard (September 21, 2012). "Romney releases tax return detail". Financial Times.(subscription required)
- ^ Pappu, Sridhar (September 2005). "The Holy Cow! Candidate". The Atlantic Monthly.
- ^ Bain & Company Profile. Funding Universe, 2000
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- ^ a b Lewis, Diane E. (January 30, 1991). "Bain agrees to reshape ownership". The Boston Globe.(subscription required)
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- ^ a b c d e Blum, Justin; Lerer, Lisa (July 20, 2011). "Romney's Record Defies Image as Job-Creator". Bloomberg News.
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- ^ a b c d e f Gavin, Robert; Pfeiffer, Sacha (June 26, 2007). "The Making of Mitt Romney: Part 3: Reaping profit in study, sweat". The Boston Globe.
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- ^ Counselor To The King. New York Times, September 24, 1989
- ^ a b c Confessore, Nicholas; Shear, Michael D. (July 16, 2012). "When Did Romney Step Back From Bain? It's Complicated, Filings Suggest". The New York Times. p. A10.
- ^ a b c d e f g h i j Healy, Beth; Kranish, Michael (July 20, 2012). "Romney kept reins, bargained hard on severance". The Boston Globe.
- ^ "Venture-Capital
Funds Grow Larger and Larger - But Start-Up Companies Find They're
Still Left Out in the Cold". The Wall Street Journal, September 7, 1989
- ^ Bain Names Chief Executive And Begins a Reorganization. New York Times, January 30, 1991
- ^ Mead Corp. to Lay Off 1,000. New York Times, July 3, 1992
- ^ "American Pad & Paper Company Profile". Answers.com. Retrieved 2012-02-11.
- ^ Deseret News: 30 companies Mitt Romney's Bain Capital invested in from 1986-1998 - "American Pad & Paper" By Jackie Hicken June 17, 2012
- ^ SEC.gov: 8-K filing December 21, 2000
- ^ SEC.gov Fiscal year end December 31, 1999 10-K for American Pad & Paper Company retrieved October 28, 2012
- ^ James Abundis and Robert Gavin, "Ampad: A controversial deal", The Boston Globe, retrieved January 4, 2012
- ^ Totes is Bought By Boston Investment Firm. New York Times, June 28, 1994
- ^ Totes To Buy A Majority Interest In Aris Isotoner. New York Times, June 6, 1997
- ^ TRW Credit Reporting Unit To Be Sold for $1 Billion. Bloomberg Business News, February 10, 1996
- ^ Large British Retailer to Buy U.S. Credit-Data Company. New York Times, November 15, 1996
- ^ Sealy to be Sold to Management and an Investor Group. New York Times, November 4, 1997
- ^ Raytheon in $358 million Deal to Sell Laundry Business. New York Times, February 24, 1998
- ^ Domino's Pizza Founder To Retire And Sell A Stake. New York Times, September 26, 1998
- ^ Playing Movies Like a Growth Stock. New York Times, December 21, 1998
- ^ a b Kranish, Michael; Helman, Scott (February 2012). "The Meaning of Mitt". Vanity Fair.
- ^ a b c Maremont, Mark (January 9, 2012). "Romney at Bain: Big Gains, Some Busts". The Wall Street Journal.
- ^ Fabrikant, Geraldine (January 30, 1991). "Bain Names Chief Executive And Begins a Reorganization". The New York Times.
- ^ Phillips, Frank (October 8, 1994). "Romney agrees to talk; union balks". The Boston Globe.
- ^ a b Yang, Jia Lynn (December 14, 2011), "Mitt Romney’s Bain Capital tenure shows mixed record on bankruptcies", Washington Post
- ^ Vaillancourt, Meg (October 10, 1994). "Romney meets with strikers Ind. workers say nothing resolved". The Boston Globe.
- ^ Phillips, Frank (January 5, 1995). "Strike-bound factory tied to Romney during US Senate race is set to close". The Boston Globe.
- ^ Hoover, Ken (January 13, 2012).Mitt Romney-Led Bain Funded Steel Dynamics' Success. Investors Business Daily
- ^ Helling, Dave (2012-01-06). "Bain Capital tied to bankruptcy, closing of KC steel plant". KansasCity.com. Retrieved 2012-02-01.
- ^ David Wren. "Romney's Bain made millions as S.C. steelmaker went bankrupt". KansasCity.com. Retrieved 2012-02-01.
- ^ "Missouri Valley Special Collections : Item Viewer". Kchistory.org. 2001-02-08. Retrieved 2012-02-01.
- ^ Sullivan, Andy (January 6, 2012). "Special report: Romney's steel skeleton in the Bain closet". Reuters. Retrieved 2012-02-01.
- ^ fundinguniverse.com Dade Behring company history. Funding Universe
- ^ a b Dade Behring Form 10K 1999 Annual Report. Securities and Exchange Commission, Filed March 30, 2000
- ^ Aventis May Sell Controlling Stake in Dade Behring. New York Times, December 20, 2000
- ^ Dade Behring Registration Statement. Securities and Exchange Commission, April 11, 2003
- ^ Farragher, Thomas; Nelson, Scott Bernard (October 24, 2002). "Business record helps, hinders Romney". The Boston Globe. p. A1.(subscription required)
- ^ a b Roche, Lisa Riley; Bernick Jr., Bob (August 20, 2001). "Public service for Romney". Deseret News.
- ^ Glenn Kessler (July 12, 2012). "Mitt Romney and his departure from Bain" (blog by expert). The Washington Post. Retrieved July 14, 2012.
- ^ a b c Kranish; Helman, The Real Romney, pp. 206–207.
- ^ "Is Romney to Blame for Cancer Death?". FactCheck. August 8, 2012.
- ^ Callum Borchers (July 16, 2012). "Mitt Romney and backers use ‘day-to-day’ to reshape questions about Bain". The Boston Globe. Retrieved August 13, 2012.
- ^ Mitt
Romney, quoted by the Boston Herald in February 1999 (Greg Gatlin,
“Romney Looks To Restore Olympic Pride,” The Boston Herald, February 12,
1999)
- ^ Bain Capital Fund VI, L.P. (February 20, 2001). "SCHEDULE 13D (Rule 13d-101)". Securities and Exchange Commission. Retrieved July 14, 2012.
"Bain Capital, Inc., a Delaware corporation ("Bain Capital"), is the
sole managing partner of the BCIP entities. Mr. W. Mitt Romney is the
sole shareholder, sole director, Chief Executive Officer and President
of Bain Capital and thus is the controlling person of Bain Capital."
- ^ Marshall, John. "No, Romney Didn’t Leave Bain in 1999". Retrieved 11 July 2012.
- ^ Borchers, Callum. "Mitt Romney stayed at Bain 3 years longer than he stated". Christopher M. Mayer. Retrieved 12 July 2012.
- ^ a b c Gentile, Sal (July 15, 2012). "Former Bain Capital partner says Romney was 'legally' CEO of Bain Capital until 2002". msnbc.com.
- ^ a b Braun, Stephen; Gillum, Jack (July 25, 2012). "Fact Check: Romney Met Bain Partners After Exit". Associated Press.
- ^ King, John. "John King: Why is 1999 so important in 2012?". CNN. Retrieved 12 July 2012.
- ^ Charles, Deborah (July 12, 2012). "Romney faces new questions over tenure at Bain". Chicago Tribune. Reuters.
- ^ Kuhnhenn, Jim (August 14, 2007). "Romney Worth As Much As $250 Million". The Washington Post. Associated Press.
- ^ a b Confessore, Nicholas; Drew, Christopher; Creswell, Julie (December 18, 2011). "Buyout Profits Keep Flowing to Romney". The New York Times.
- ^ Hicks, Josh (November 2, 2011). "Romney’s claims about Bain Capital job creation". The Washington Post.
- ^ a b Hagey, Keach (January 11, 2012). "Mitt Romney’s Bain Capital days: A black box". Politico.
- ^ Callum Borchers; Christopher Rowland (July 12, 2012). "Mitt
Romney stayed at Bain 3 years longer than he stated: Firm’s 2002
filings identify him as CEO, though he said he left in 1999". The Boston Globe. Retrieved July 14, 2012.
- ^ King, John. "John King: Why is 1999 so important in 2012?". CNN. Retrieved 12 July 2012.
- ^ Glenn Kessler (July 13, 2012). "Do Bain SEC documents suggest Mitt Romney is a criminal?" (blog by expert). The Washington Post. Retrieved July 14, 2012.
- ^ Michael D. Shear (July 13, 2012). "Romney Seeks Obama Apology for Bain Attacks". The New York Times. Retrieved July 14, 2012.
- ^ "Mitt Romney's Own 2002 Testimony Undermines Bain Departure Claim". Huffington Post. July 12, 2012. Retrieved July 14, 2012.
"[Statement by Bain] "Mitt Romney left Bain Capital in February 1999 to
run the Olympics and has had absolutely no involvement with the
management or investment activities of the firm or with any of its
portfolio companies since the day of his departure," the statement
reads. "Due to the sudden nature of Mr. Romney's departure, he remained
the sole stockholder for a time while formal ownership was being
documented and transferred to the group of partners who took over
management of the firm in 1999. Accordingly, Mr. Romney was reported in
various capacities on SEC filings during this period.""
- ^ Elspeth Reeve (July 12, 2012). "Why Romney's Quit Date at Bain Matters". Atlantic Wire. Retrieved July 14, 2012.
- ^ Group to Buy Controlling Interest in Datek Online for $700 Million. New York Times, December 02, 2000
- ^ Bain Capital Buys Toys Unit of Consolidated Stores. New York Times, December 09, 2000
- ^ Buyout Profits Keep Flowing to Romney. New York Times, December 18, 2011
- ^ Bain Capital Buys Stake In Huntsman, Chemical Company. New York Times, February 24, 2001
- ^ Huntsman, Bain Capital dealing: Huntsman offering $600 million equity stake to venture firm. Deseret News, Feb. 24, 2001
- ^ U.S. Investors Agree to Buy Burger King From Diageo for $2.26 Billion. New York Times, July 26, 2002
- ^ A Lower Price Is Said to Revive Burger King Sale, New York Times, December 12, 2002
- ^ Grace Wong (2006-05-12). "Burger King IPO set to fire up". CNN Money. Retrieved 2007-09-30.
- ^ Vivendi Finishes Sale of Houghton Mifflin To Investors. New York Times, January 1, 2003
- ^ Sorkin, Andrew Ross and Rozhon, Tracie. "Three Firms Are Said to Buy Toys 'R' Us for $6 Billion." New York Times, March 17, 2005
- ^ What's Next for Toys 'R' Us?. Wall Street Journal, March 18, 2005
- ^ Deal Mania: Shades of the '80s: The leveraged buyout is back in vogue. US News & World Report, April 10, 2005
- ^ "Capital Firms Agree to Buy SunGard Data in Cash Deal." Bloomberg L.P., March 29, 2005
- ^ Do Too Many Cooks Spoil the Takeover Deal?. New York Times, April 3, 2005
- ^ Parent of Dunkin' Donuts Sold For $2.4 Billion to Equity Firms (New York Times, 2005
- ^ Sorkin, Andrew Ross. "HCA Buyout Highlights Era of Going Private." New York Times, July 25, 2006
- ^ Bloomberg News (2006-08-04). "Technology; Royal Philips Sells Unit for $4.4 Billion". New York Times. Retrieved 2008-04-27.
- ^ KKR in deal to buy Philips Semiconductors. Forbes, August 2, 2006
- ^ Bain Adds Guitar Center To Its Lineup. Forbes, June 27, 2007
- ^ Bain to Buy Burlington Coat Factory. The Street.com, January 18, 2006
- ^ Consortium Buys Michaels for $6 Billion. New York Times, July 1, 2006
- ^ Zimmerman, Ann; Berman, Dennis K. (June 20, 2007). "Home Depot Boosts Buyback, Sets Unit Sale". The Wall Street Journal.
- ^ Private Equity's White-Knuckle Deal. Business Week, September 17, 2007
- ^ Bain Plucks Up Guitar Center, The Street, June 27, 2007
- ^ Bain Capital Agrees to Buy Edgars for 25 Billion Rand. Bloomberg, February 8, 2007]
- ^ Bavaria set to Boom with Bain. Sail World, July 1, 2007
- ^ Bain cheers return on Sensata float. Financial News, March 12, 2010
- ^ Robert Marich. "The Weather Channel Sale Wraps". Broadcasting & Cable. Archived from the original on 15 September 2008. Retrieved 2008-09-26.
- ^ Michael J. de la Merced (July 7, 2008). "Weather Channel Is Sold to NBC and Equity Firms". New York Times. Retrieved 2008-09-17.
- ^ "Bain acquires Clear Channel Communications". Reuters.[dead link]
- ^ "D&M Saga Finally Ends With Bain Capital Deal - 2008-07-07 06:00:00". TWICE. Retrieved 2012-02-11.
- ^ Barboza, David (June 22, 2009). "Bain Capital to Invest in Chinese Retailer". The New York Times.
- ^ Bain Capital pays $1.6 billion for Dow division, Mass High Tech, March 2, 2010
- ^ Dagher, Veronica; Holmes, Elizabeth (October 12, 2010). "Bain Pays .8 Billion for Gymboree". The Wall Street Journal.
- ^ Physio-Control's sale to Bain completed, The Seattle Times, January 30, 2012
- ^ "Genpact Announces Agreement for Bain Capital Partners to Buy $1 Billion of Shares from Existing Sponsors". Retrieved 2013-07-08.
- ^ "Deals of the day – mergers and acquisitions". Reuters. October 10, 2012.
- ^ "BMC Software Signs Definitive Agreement to be Acquired for $46.25 per Share in Cash". Retrieved 2013-07-08.
- ^ Bain Capital Private Equity (company website)
- ^ Bain Capital Europe (company website)
- ^ a b Data collected from Preqin, a private equity database system
- ^ a b c d e Includes
coinvestment funds for Bain Capital Fund VI ($300m), Bain Capital Fund
VII ($617m), Bain Capital Fund VIII ($750m), Bain Capital Fund IX ($2
billion) and Bain Capital Fund X ($1.8 billion), each raised alongside
the main funds
- ^ Bain Capital Ventures (company website)
- ^ Rusli, Evelyn M. (2012-01-30). "Bain Capital Ventures Raises $600 Million Fund". Dealbook.nytimes.com. Retrieved 2012-02-11.
- ^ Tuesday, June 17th, 2008 (2012-01-31). "LinkedIn Closes Its Round; Got That Billion Dollar Valuation". Techcrunch.com. Retrieved 2012-02-11.
- ^ Business Wire (2009-04-20). "SurveyMonkey Announces Group Led by Spectrum Equity to Become Majority Investor". Businesswire.com. Retrieved 2012-02-11.
- ^ Brookside Capital (company website)
- ^ Sankaty Advisors (company website)
- ^ Absolute Return Capital (company website)
- ^ Vickers, Marcia (June 27, 2007). "The Republicans' Mr. Fix-it". Fortune.
- ^ Kosman, The Buyout of America, p. 106.
- ^ Kosman, The Buyout of America, p. 118.
Bibliography
External links
https://en.wikipedia.org/wiki/Bain_Capital
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