TPG Capital is one of the largest
private equityPrivate equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investment firms globally, focused on
leveraged 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...
,
growth 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...
and
leveraged recapitalizationIn 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...
investments in distressed companies and turnaround situations. TPG also manages investment funds specializing in
growth 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...
, venture capital,
public equityThe capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
, and debt investments. The firm invests in a broad range of industries including consumer/retail,
mediaMass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
and telecommunications, industrials, technology, travel/leisure and health care.
The firm was founded in 1992 by
David BondermanDavid Bonderman is a founding partner of TPG Capital and its Asian affiliate, Newbridge Capital...
,
James CoulterJames Coulter is an American investment manager, and co-founder of private equity firm TPG Capital, originally known as the Texas Pacific Group.-Education:...
and
William S. Price IIIWilliam S. "Bill" Price III is one of the three co-founders and a partner emeritus of TPG Capital, formerly known as the Texas Pacific Group, which is one of the largest private equity firms globally....
. Since inception, the firm has raised more than $50 billion of investor commitments across more than 18 private equity funds.
TPG is headquartered in
Fort Worth, TexasFort Worth is the 16th-largest city in the United States of America and the fifth-largest city in the state of Texas. Located in North Central Texas, just southeast of the Texas Panhandle, the city is a cultural gateway into the American West and covers nearly in Tarrant, Parker, Denton, and...
and
San Francisco, CaliforniaSan Francisco , officially the City and County of San Francisco, is the financial, cultural, and transportation center of the San Francisco Bay Area, a region of 7.15 million people which includes San Jose and Oakland...
,. The company has additional offices in Europe, Asia, Australia and North America.
Private equity funds
TPG has historically relied primarily on
private equity fundA 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, pools of committed capital from
pension fundA pension fund is any plan, fund, or scheme which provides retirement income.Pension funds are important shareholders of listed and private companies. They are especially important to the stock market where large institutional investors dominate. The largest 300 pension funds collectively hold...
s, insurance companies,
endowmentsA financial endowment is a transfer of money or property donated to an institution. The total value of an institution's investments is often referred to as the institution's endowment and is typically organized as a public charity, private foundation, or trust....
,
fund of fundsA "fund of funds" is an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities. This type of investing is often referred to as multi-manager investment...
,
high net worth individualA high-net-worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million. As explained below, the U.S...
s,
sovereign wealth fundA sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds invest globally. Some of them have grabbed attention making bad investments in several Wall Street financial...
s and other institutional investors. As of the end of 2008, TPG had completed fundraising for over 20 funds with total investor commitments of over $50 billion.
The firm manages investment funds in a number of distinct strategies including:
- TPG's flagship 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...
funds
- 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...
funds, particularly focused on biotechnologyBiotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
investments
- Distressed debt
Distressed 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...
and other creditCredit analysis is the method by which one calculates the creditworthiness of a business or organization. The audited financial statements of a large company might be analyzed when it issues or has issued bonds. Or, a bank may analyze the financial statements of a small business before making or...
strategies invested through a series of funds raised in 2007
- Asian and Latin American funds, including the firm's Newbridge and TPG Asia fund family
- Other private equity funds. This includes TPG's T3 Partners funds, which invest in technology focused deals alongside the firm's main buyout funds. TPG Star has a broad investment mandate including buyouts, venture capital and growth capital, however all of its investments are at the smaller end of the range, compared to TPG's traditional investments.
| Fund |
Vintage
Year |
Committed
Capital ($m) |
| TPG's Flagship Leveraged Buyout Funds |
| Texas Pacific Group Partners |
1994 |
$721 |
| Texas Pacific Group Partners II |
1997 |
$2,500 |
| Texas Pacific Group Partners III |
2000 |
$3,414 |
| Texas Pacific Group Partners IV |
2003 |
$5,300 |
| Texas Pacific Group Partners V |
2006 |
$15,000 |
| TPG Partners VI |
2008 |
$19,800 |
| Venture capital funds |
| TPG Ventures |
2001 |
$339 |
| TPG Biotechnology Partners |
2002 |
$70 |
| TPG Biotechnology Partners II |
2006 |
$402 |
| TPG Biotechnology Partners III |
2008 |
$550 |
| Distressed debt funds |
| TPG Credit Management I |
2007 |
$1,000 |
| TPG Credit Strategies |
2007 |
$443 |
| Newbridge and TPG Asia funds |
| Newbridge Investment Partners |
1995 |
$120 |
| Newbridge Latin America |
1995 |
$300 |
| Newbridge Andean Partners |
1996 |
$150 |
| Newbridge Asia II |
1998 |
$392 |
| Newbridge Asia III |
2001 |
$724 |
| Newbridge Asia IV |
2005 |
$1,500 |
| TPG Asia V |
2008 |
$4,250 |
| Other private equity funds |
| T3 Partners |
1999 |
$1,000 |
| T3 Partners II |
2001 |
$378 |
| TPG Star |
2007 |
$1,500 |
Source: PreqinPreqin is a research and consultancy firm focusing on alternative asset classes. The company covers private equity, real estate, infrastructure, and hedge funds and is headquartered in London, UK, with additional offices in New York and Singapore. Preqin maintains a number of publications and...
Founding
The Texas Pacific Group, as it was originally known, was founded in 1992 by
David BondermanDavid Bonderman is a founding partner of TPG Capital and its Asian affiliate, Newbridge Capital...
,
James Coulter-External links:...
and
William S. Price IIIWilliam S. "Bill" Price III is one of the three co-founders and a partner emeritus of TPG Capital, formerly known as the Texas Pacific Group, which is one of the largest private equity firms globally....
. Prior to founding TPG, Bonderman and Coulter had worked for Robert M. Bass making leveraged buyout investments during the 1980s. In 1993, Coulter and Bonderman partnered with
William S. Price IIIWilliam S. "Bill" Price III is one of the three co-founders and a partner emeritus of TPG Capital, formerly known as the Texas Pacific Group, which is one of the largest private equity firms globally....
, who was Vice President of Strategic Planning and Business Development for
GE CapitalGE Capital is the financial services unit of General Electric, one of five major units. Its various divisions include GE Capital Aviation Services, GE Capital Real Estate, GE Energy Financial Services and GE Money....
to complete the buyout of
Continental AirlinesContinental Airlines was a major American airline now merged with United Airlines. On May 3, 2010, Continental Airlines, Inc. and UAL, Inc. announced a merger via a stock swap, and on October 1, 2010, the merger closed and UAL changed its name to United Continental Holdings, Inc...
. At the time, TPG was virtually alone in its conviction that there was an investment opportunity with the airline. The plan included bringing in a new management team, improving aircraft utilization and focusing on lucrative routes. By 1998, TPG had generated an annual internal rate of return of 55% on its investment.
Texas Pacific Group in the late 1990s
In 1997, TPG completed fundraising for its second private equity fund, with over $2.5 billion of investor commitments. In June 1996, TPG acquired the AT&T Paradyne unit, a multimedia communications business, from
Lucent TechnologiesAlcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a French-owned technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs...
for $175 million. Also in 1996, TPG invested in Beringer Wine, Ducati Motorcycles and
Del Monte FoodsDel Monte Foods is an American food production and distribution company headquartered in San Francisco, California. Del Monte Foods is one of the country's largest producers, distributors and marketers of branded food and pet products for the U.S. retail market, generating approximately $3.6...
.
TPG's most notable 1997 investment was its takeover of J. Crew. TPG acquired an 88% stake in the retailer for approximately $500 million, however the investment struggled due to the relatively high purchase price paid relative to the company's earnings. The company was able to complete a turnaround beginning in 2002 and complete an initial public offering in 2006.
The following year, in 1998, TPG led an investor group in a minority investment in
Oxford Health PlansUnitedHealth Group Incorporated is a diversified health and "well-being" company. Headquartered in Minnetonka, Minnesota, UnitedHealth Group offers a spectrum of products and services through two operating businesses: United Healthcare and Optum. Through its family of subsidiaries and divisions,...
. TPG and its
co-investorsAn equity co-investment is a minority investment, made directly into an operating company, alongside a financial sponsor or other private equity investor, in a leveraged buyout, recapitalization or growth capital transaction. In certain circumstances, venture capital firms may also seek...
invested $350 million in a
convertible preferred stockPreferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
that can be converted into 22.1% of Oxford. The company completed a buyback of the TPG's
PIPE convertibleA private investment in public equity, often called a PIPE deal, involves the selling of publicly traded common shares or some form of preferred stock or convertible security to private investors. In the U.S...
in 2000 and would ultimately be acquired by
UnitedHealth GroupUnitedHealth Group Incorporated is a diversified health and "well-being" company. Headquartered in Minnetonka, Minnesota, UnitedHealth Group offers a spectrum of products and services through two operating businesses: United Healthcare and Optum. Through its family of subsidiaries and divisions,...
in 2004.
As the decade came to a close, TPG was once again fundraising, for its third private equity fund. This time, however TPG was raising not only a new buyout fund, but also a new fund, T3 Partners that would invest alongside the main fund in technology oriented investments. In 1999, TPG invested in
Piaggio S.p.APiaggio based in Pontedera, Italy encompasses seven brands of scooters, motorcycles and compact commercial vehicles. As the fourth largest producer of scooters and motorcycles in the world, Piaggio produces more than 600,000 vehicles annually, with five research and development centers, more than...
, Bally International (including
Bally ShoeThe Bally Shoe company was founded as "Bally & Co" high fashion in 1851 by Carl Franz Bally and his brother Fritz in the basement of their family home in Schönenwerd in the Canton of Solothurn, Switzerland.-Business:...
), and
ON SemiconductorON Semiconductor , is a semiconductors supplier company. Products include power and signal management, logic, discrete and custom devices for automotive, communications, computing, consumer, industrial, LED lighting, medical, military/aerospace and power applications...
.
TPG has also become recognized for its dedicated operations group that has become a major part of the process from investment to sale in many of their portfolio companies. The group is lead by Dick Boyce and involves itself in tricky turnaround situations, operations improvement and other tasks that help create value in the company. Other major private equity firms have begun to develop operations group as well, attempting to recreate the model at TPG but most have had trouble creating as expansive a program.
Texas Pacific Group in the early 2000s
In 2000, TPG and
Leonard Green & PartnersLeonard 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....
invested $200 million to acquire
PetcoPETCO 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...
, 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.
That same year, in 2000, TPG completed the controversial acquisition of
Gemplus SAAcquired by the Texas Pacific Group in 2000, Luxemburg-based Gemplus International SA was a provider of smart cards and related technologies, until its June 2, 2006 merger with rival Axalto; the combined entity is known as Gemalto....
, one of the leading smart card manufacturers. TPG won a struggle with the company's founder, Marc Lassus, for control of the company. Also in 2000, TPG completed an investment in
Seagate TechnologySeagate Technology is one of the world's largest manufacturers of hard disk drives. Incorporated in 1978 as Shugart Technology, Seagate is currently incorporated in Dublin, Ireland and has its principal executive offices in Scotts Valley, California, United States.-1970s:On November 1, 1979...
.
In 2001, TPG acquired Telenor Media, a Norwegian phone-directory company, for $660m, and shortly thereafter acquired a controlling interest in the third largest silicon-wafer maker
MEMC Electronic MaterialsMEMC Electronic Materials is a United States manufacturer of silicon wafers for the semiconductor industry. The company's stock is part of the S&P 500 stock index. Originally established in 1959 as the Monsanto Electronic Materials Company, a business unit of Monsanto Company, the company is...
.
In July 2002, TPG, together with
Bain CapitalBain 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...
and
Goldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
, announced the high profile $2.3 billion leveraged buyout of
Burger 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...
from
DiageoDiageo plc is a global alcoholic beverages company headquartered in London, United Kingdom. It is the world's largest producer of spirits and a major producer of beer and wine....
. However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, TPG and its co-investors agreed on a reduced $1.5 billion purchase price for the investment. The TPG 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 KingThe Burger King was a character created as the advertising mascot for the international fast-food restaurant franchise Burger King who became famous in numerous television commercials, including the Burger King Kingdom. The first iteration of the King was part of Burger King sign at the first store...
character in advertising. In February 2006, Burger King announced plans for an
initial public offeringAn initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
.
In November 2003, TPG provided a proposal to buy
Portland General ElectricPortland General Electric is an electrical utility based in Portland in the U.S. state of Oregon. It distributes electricity to customers in parts of Multnomah, Clackamas, Marion, Yamhill, Washington, and Polk counties - half of the inhabitants of Oregon...
from
EnronEnron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
. However, concerns about debt and local politics led to Oregon's
Public Utilities CommissionA Utilities commission, Utility Regulatory Commission , Public Utilities Commission or Public Service Commission is a governing body that regulates the rates and services of a public utility...
regulators to deny permission for the purchase March 10, 2005.
TPG ventured into the film business in late 2004 in the major leveraged buyout of
Metro-Goldwyn-MayerMetro-Goldwyn-Mayer Inc. is an American media company, involved primarily in the production and distribution of films and television programs. MGM was founded in 1924 when the entertainment entrepreneur Marcus Loew gained control of Metro Pictures, Goldwyn Pictures Corporation and Louis B. Mayer...
. A consortium led by TPG and
Sony, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
completed the $4.81 billion buyout of the film studio. The consortium also included media-focused firms
Providence Equity PartnersProvidence Equity Partners is a global private equity investment firm focused on media, entertainment, communications and information investments...
and
Quadrangle GroupQuadrangle Group is a private investment firm focused on private equity. The firm invests in middle-market companies within the media, communications and information-based sectors....
as well as
DLJ Merchant Banking PartnersDLJ Merchant Banking Partners is a private equity investment firm focused on leveraged buyout transactions. The firm is currently an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette, the investment bank acquired by Credit Suisse First Boston in 2000...
. The transaction, which was announced in September 2004, was completed in early 2005.
Also in 2005, TPG was one of seven private equity firms involved in the buyout of
SunGardSunGard is a multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. It was formed in 1983, as a spin-off of the computer services division of Sun Oil Company, during a period of low crude oil...
in a transaction valued at $11.3 billion. TPG's partners in the acquisition were
Silver Lake PartnersSilver Lake is a US-based private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled and related industries...
,
Bain CapitalBain 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...
,
Goldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
, Kohlberg Kravis Roberts,
Providence Equity PartnersProvidence Equity Partners is a global private equity investment firm focused on media, entertainment, communications and information investments...
, and The Blackstone Group. This represented the largest leveraged buyout completed since the takeover of
RJR NabiscoRJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
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 SemiconductorFreescale Semiconductor, Inc. is a producer and designer of embedded hardware, with 17 billion semiconductor chips in use around the world. The company focuses on the automotive, consumer, industrial and networking markets with its product portfolio including microprocessors, microcontrollers,...
. The SunGard transaction is also notable in the number of firms involved in the transaction, the largest
club dealA club deal, in finance, refers to a leveraged buyout or other private equity investment that involves several different private equity investment firms. Club deal can also be referred as syndicated investment....
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.
TPG and 2006-2007 Buyout Boom
In early 2006, as TPG was completing fundraising for its fifth private equity fund and the buyout boom was entering full swing, TPG co-founder Bill Price announced that he would scale back his work at the firm to focus on personal pursuits including his holdings in wine vineyards.
On December 1, 2006, it was announced TPG and Kohlberg Kravis Roberts had been exploring the possibility of a record $100 billion leveraged buyout of the second-largest retailer in the U.S. Home Depot. Although this massive buyout was never actually completed, TPG was a leading investor during the
2006-2008 buyout boomPrivate equity in the 2000s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.The...
, completing some of the largest transactions in this period.
| Investment |
Year |
Company Description |
Ref. |
Neiman MarcusNeiman Marcus, formerly Neiman-Marcus, is a luxury specialty retail department store operated by the Neiman Marcus Group in the United States. The company is headquartered in the One Marcus Square building in Downtown Dallas, Texas, and competes with other department stores such as Saks Fifth...
|
2005 |
TPG, together with Warburg PincusWarburg Pincus, LLC is an American private equity firm with offices in the United States, Europe, Brazil and Asia. It has been a private equity investor since 1966...
acquired Neiman Marcus Group, the owner of luxury retailers Neiman MarcusNeiman Marcus, formerly Neiman-Marcus, is a luxury specialty retail department store operated by the Neiman Marcus Group in the United States. The company is headquartered in the One Marcus Square building in Downtown Dallas, Texas, and competes with other department stores such as Saks Fifth...
and Bergdorf GoodmanBergdorf Goodman is a luxury goods department store based on Fifth Avenue in Midtown Manhattan in New York City. The company was founded in 1899 by Herman Bergdorf and was later owned and managed by Edwin Goodman, and later his son Andrew Goodman....
, in a $5.1 billion buyout in May 2005. |
|
| Freescale Semiconductor Freescale Semiconductor, Inc. is a producer and designer of embedded hardware, with 17 billion semiconductor chips in use around the world. The company focuses on the automotive, consumer, industrial and networking markets with its product portfolio including microprocessors, microcontrollers,...
|
2006 |
TPG together with The Blackstone Group, The Carlyle Group and PermiraPermira is a United Kingdom-based private equity firm with global reach. The firm advises funds with a total committed capital of approximately €20 billion....
completed the $17.6 billion takeover of the semiconductor company. At the time of its announcement, Freescale would be the largest leveraged buyout of a technology company ever, surpassing the 2005 buyout of SunGardSunGard is a multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. It was formed in 1983, as a spin-off of the computer services division of Sun Oil Company, during a period of low crude oil...
. |
|
Harrah's EntertainmentCaesars Entertainment Corporation is a private gaming corporation that owns and operates over 50 casinos, hotels, and seven golf courses under several brands. The company, based in Paradise, Nevada, is the largest gaming company in the world, with yearly revenues $8.9 billion...
|
2006 |
On December 19, 2006, TPG and Apollo ManagementApollo Global Management, LLC is a private equity investment firm, founded in 1990 by former Drexel Burnham Lambert banker Leon Black. The firm specializes in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations and industry...
announced an agreement to acquire the gaming company for $27.4 billion, including the assumption of existing debt. |
|
| Sabre Holdings Sabre Holdings or Sabre, Inc. is an American privately held travel technology company, encompassing several brands in three global distribution system channels: travel agency, airline, and direct to consumer. These areas are serviced by TSG's three main business groups...
|
2006 |
TPG and Silver Lake Partners Silver Lake is a US-based private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled and related industries...
announced a deal to buy Sabre HoldingsSabre Holdings or Sabre, Inc. is an American privately held travel technology company, encompassing several brands in three global distribution system channels: travel agency, airline, and direct to consumer. These areas are serviced by TSG's three main business groups...
, which operates TravelocityTravelocity is an online travel agency and wholly owned subsidiary of Sabre Holdings Corporation, which was a publicly traded company until taken private by Silver Lake Partners and Texas Pacific Group in March 2007...
, Sabre Travel NetworkSabre Travel Network is the line of technology developed by Sabre Inc. that services travel agencies directly. Sabre Travel Network began when the Sabre Computer reservations system was installed in Briarcliff Manor, New York in 1960. It began as the reservations system for American Airlines...
and Sabre Airline SolutionsSabre Airline Solutions is a subsidiary of Sabre Holdings. The main product of Sabre Airline Solutions is the SabreSonic system. This provides departure control, reservations, and, inventory management. Other products include resource management, fares and revenue management, data services,...
, for approximately $4.3 billion in cash, plus the assumption of $550 million in debt. Earlier in the year, Blackstone acquired Sabre's chief competitor TravelportTravelport is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry...
. |
|
Univision CommunicationsUnivision Communications is an American Spanish language media company in the United States. Its headquarters are in Midtown Manhattan, New York City. Prior to 2007, the headquarters were in Century City, Los Angeles, California, USA.- History :...
|
2006 |
A consortium of TPG, Madison Dearborn Partners, Providence Equity Partners Providence Equity Partners is a global private equity investment firm focused on media, entertainment, communications and information investments...
, Thomas 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....
and Haim SabanHaim Saban is an Egyptian born Israeli-American television and media proprietor. With an estimated net worth of $3.5 billion, he is ranked by Forbes as the 104th richest person in America.-Biography:...
(Saban Entertainment) acquired The Spanish language broadcaster on March 12, 2006 in a $13.7 billion leveraged buyout. The buyout left the company with a debt level of twelve times its annual cash flow. |
|
| Alltel Wireless |
2007 |
TPG and Goldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
announced the acquisition of Alltel Wireless in a $27 billion buyout in May 2007. The transaction was approved by the Federal Communications Commission and closed on November 16, 2007. However just over six months later, on June 5, 2008, TPG and Goldman agreed to sell Alltel to Verizon for slightly more than it had paid for the company amidst a deteriorating economic outlook. |
|
AvayaAvaya Inc. is a privately held computer networking, information technology and telecommunications company that is a global provider of business communications systems. The international head quarters is in Basking Ridge, New Jersey, United States...
|
2007 |
TPG and Silver Lake Partners Silver Lake is a US-based private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled and related industries...
completed an $8.2 billion leveraged buyout of the enterprise telephony and call center technology company that was formerly a unit of Lucent TechnologiesAlcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a French-owned technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs...
|
|
| Biomet Biomet, Inc. is one of the world leading medical device manufacturer located in the Warsaw, Indiana business cluster. The company specializes in reconstructive products for hips, knees and shoulders, fixation devices, orthopedic support devices, dental implants, spinal implants and operating room...
|
2007 |
TPG, The Blackstone Group, Kohlberg Kravis Roberts and Goldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
acquired the medical devices company for $11.6 billion. |
|
First DataFirst Data Corporation is an American payment processing company headquartered in Atlanta, Georgia. First Data is a provider of electronic commerce and payment solutions...
|
2007 |
TPG and Kohlberg Kravis Roberts completed the $29 billion buyout of the credit and debit card payment processor and former parent of Western UnionThe Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
. Michael Capellas, previously the CEO of MCI CommunicationsMCI Communications Corp. was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony and ushered in the competitive long-distance telephone industry. It was headquartered in Washington,...
and CompaqCompaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....
was named CEO of the privately held company. |
|
| Midwest Air Group Midwest Air Group, Inc. was an American airline holding company based in Oak Creek, Wisconsin which owned Midwest Airlines. It was ultimately controlled by parent company, TPG Capital Texas Pacific Group. Delta with the merger of Northwest Airlines Inc,...
|
2007 |
On August 12, 2007 Agreed to purchase Midwest Air Group Midwest Air Group, Inc. was an American airline holding company based in Oak Creek, Wisconsin which owned Midwest Airlines. It was ultimately controlled by parent company, TPG Capital Texas Pacific Group. Delta with the merger of Northwest Airlines Inc,...
and its subsidiaries including Midwest AirlinesMidwest Airlines was a U.S.-based airline and was also an operating brand of Republic Airways Holdings based in Oak Creek, Wisconsin. operating from Milwaukee's General Mitchell International Airport...
ending the hostile takeover attempt by AirTran AirwaysAirTran Airways, a subsidiary of the Dallas, Texas-based Southwest Airlines, is an American low-cost airline headquartered in Orlando, Florida. AirTran operates over 650 daily flights , primarily in the eastern and midwestern United States...
. Northwest AirlinesNorthwest Airlines, Inc. was a major United States airline founded in 1926 and absorbed into Delta Air Lines by a merger approved on October 29, 2008, making Delta the largest airline in the world...
also invested in the transaction alongside TPG as a passive equity co-investor. On August 14, 2007 Increased its offer to purchase Midwest after a late attempt by Airtran to increase its bid for Midwest. The purchase price was $452 million. Midwest lost money during TPG's ownership having to accept a loan from Republic Airways HoldingsRepublic Airways Holdings, Inc. is an aviation holding corporation based in Indianapolis, Indiana, which owns six airlines operating in the United States: Chautauqua Airlines, Frontier Airlines, Republic Airlines, Shuttle America, and the former Lynx Aviation....
to avoid bankruptcy. Republic took over Midwest's fleet. Eventually TPG sold the company to Republic for $31 million. |
|
Surgical Care AffiliatesSurgical Care Affiliates, LLC, headquartered in Birmingham, Alabama operates a network of 150 ambulatory surgery centers and surgical hospitals across the country with approximately 3,700 full-time employees and more than 2,000 physician partners...
|
2007 |
In June 2007, TPG completed the carveout of HealthSouth Corporation's ambulatory surgery business for $920 million |
|
| TXU Energy Future Holdings Corporation is an electric utility company headquartered in Energy Plaza in Downtown Dallas, Texas, United States. The company was known as TXU until its $45 billion leveraged buyout by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs...
|
2007 |
An investor group, led by TPG and Kohlberg Kravis Roberts, and together with Goldman Sachs Capital PartnersGoldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
completed the $44.37 billion buyout of the regulated utility and power producer. The investor group had to work closely with ERCOTThe Electric Reliability Council of Texas formed in 1970, is one of eight Independent System Operators in North America, and is the successor to the Texas Interconnected System...
regulators to gain approval of the transaction but had significant experience with the regulators from their earlier buyout of Texas GencoTexas Genco is a major power generation firm, active in the deregulated Texas electricity market and owns several major power plants in the Houston area that serve area power needs....
. TXU is the largest buyout in history, and retained this distinction when the announced buyout of BCEBell Canada is a major Canadian telecommunications company. Including its subsidiaries such as Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for telephone and DSL Internet services in most of Canada east of Manitoba and in the northern territories,...
failed to close in December 2008. The deal is also notable for a drastic change in environmental policyEnvironmental policy is any [course of] action deliberately taken [or not taken] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on...
for the energy giant, in terms of its carbon emissions from coal power plantsA fossil-fuel power station is a power station that burns fossil fuels such as coal, natural gas or petroleum to produce electricity. Central station fossil-fuel power plants are designed on a large scale for continuous operation...
and funding alternative energyAlternative energy is an umbrella term that refers to any source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels....
. |
|
In early 2007, the firm, officially changed its name to
TPG Capital, rebranding all of its funds across different geographies. The firm's Asian funds, which had historically been managed by TPG Newbridge, a joint venture with
Blum CapitalBlum Capital is a private equity firm focused on leveraged buyout, growth capital and PIPE investments in small cap and middle-market companies across a range of industries. The firm is known for pioneering a hybrid private equity / strategic block investment strategy in public companies.The firm,...
.
TPG and the Credit Crisis
On April 7, 2008, TPG leads a $7 billion investment in
Washington MutualWashington Mutual, Inc. , abbreviated to WaMu, was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States' largest savings and loan association until its collapse in 2008....
. On September 25, 2008, Washington Mutual is taken over by the government costing TPG a 1.35 Billion dollar investment.
On 12 March 2010, Gretchen Morgensen in the
New York Times discussed TPG's role as a private equity investor in Greek mobile phone operator Wind Hellas, formerly TIM Hellas, which filed for bankruptcy protection late last year.
http://www.nytimes.com/2010/03/14/business/14gret.html Morgensen raises some interesting questions about the circumstances in which TPG and fellow private equity investors Apax Partners of London redeemed a significant quantity of "convertible preferred equity certificates" held by them to repay their own "deeply subordinated
shareholder loanShareholder loan is a debt-like form of financing provided by shareholders. Usually, it is the most junior debt in the company's debt portfolio, and since this loan belongs to shareholders it should be treated as equity. Maturity of shareholder loans is long with low or deferred interest payments...
s" during a period in which a significant and apparently unexplained spike occurred in the market value of the certificates.
Post Recession Activity
On July 13, 2011, affiliates of TPG Capital acquired
PRIMEDIAPRIMEDIA Inc. is privately held American media company fully owned by TPG Capital.Consumer Source Inc. is the sole operating division of PRIMEDIA and helps millions of consumers find apartments, houses for rent, and new homes for sale through its Internet, mobile, and print products...
for approximately $525 million, or $7.10 per share in cash.
Newbridge Capital
In 1994, TPG,
Blum CapitalBlum Capital is a private equity firm focused on leveraged buyout, growth capital and PIPE investments in small cap and middle-market companies across a range of industries. The firm is known for pioneering a hybrid private equity / strategic block investment strategy in public companies.The firm,...
and ACON Investments created Newbridge Capital, a joint-venture to invest in emerging markets, particularly Asia and later Latin America. At its peak, Newbridge managed over $3.2 billion. Newbridge was headquartered alongside TPG in Fort Worth and San Francisco with investment offices across the Asia-Pacific region in
Hong KongHong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
,
MelbourneMelbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
,
MumbaiMumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
,
SeoulSeoul , officially the Seoul Special City, is the capital and largest metropolis of South Korea. A megacity with a population of over 10 million, it is the largest city proper in the OECD developed world...
,
ShanghaiShanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
,
SingaporeSingapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, and
Tokyo, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
. In 1995, Newbridge also ventured into Latin America, raising a $300 million fund and then a follow up $150 million fund in 1996. After its debut funds in the mid 1990s, Newbridge did not continue to focus on Latin America.
Since its founding, Newbridge developed a specialization in five broad industry groups: financial services, technology and telecom, healthcare, consumer, and industrials. Newbridge was involved in a number of the largest and most notable private equity transactions in Asia including:
- Shenzhen Development Bank
Shenzhen Development Bank Co., Ltd. is a bank based in Shenzhen, Guangdong, People's Republic of China. It is listed on the Shenzhen Stock Exchange.-External links:*...
- the first control purchase of a Chinese national bank by a foreign entity since 1949
- Korea First Bank - the first foreign acquisition of a South Korean bank
- Hanaro Telecom - a major Asian proxy contest, that was the largest at that time
- Matrix Laboratories - the largest private equity transaction in the Indian pharmaceutical industry, to that point
In the early 2000s, TPG assumed full ownership and control over the Newbridge joint venture, renaming the firm TPG Newbridge. At the beginning of 2007, when the firm officially changed its name from Texas Pacific Group to TPG Capital, TPG Newbridge's Asian funds were also rebranded as the TPG Asia Funds.
TPG remained active in Asia in 2008. On August 4, TPG, along with
Global Infrastructure PartnersGlobal Infrastructure Partners is an infrastructure owning company, a private equity fund led by Credit Suisse and General Electric. Current assets include a 75% stake in London City Airport, Biffa Limited, a UK based waste management company and Gatwick Airport after recently acquiring it from...
, offered to buy
Asciano LimitedAsciano Limited is an Australian transport infrastructure and operations company. It was split out of Toll Holdings in June 2007. The incoming CEO is John Mullen who will begin on 14 February 2011. The outgoing CEO Mark Rowsthorn will be with the company until mid 2011...
for AUD 2.9 billion in an unsuccessful attempt to complete an unsolicited takeover. On October 31, 2008 TPG completed the purchase of a 35% interest in
P.T. Bumi ResourcesBumi Laut Group is an established and growing business group, primarily involved in shipping and logistics oriented businesses, among others:• Shipowning & Operating; • Shipping Agencies; • Shipmanagement ;...
, from its previous owner Bakrie & Brothers, Indonesia, for $1.3 billion.
Recognition
During 2005 and 2006, TPG was recognized by several members of the media for its performance. The firm was called
- "Firm of the Year" by Buyouts Magazine.;
- "Best Global Firm of the Year" by Euromoney Magazine
Euromoney magazine, a monthly periodical, is the flagship publication of business and financial publisher Euromoney Institutional Investor....
- "North American Large Cap Private Equity Firm of the Year" by Global Finance Magazine
Global Finance is an English-language monthly financial magazine.Joseph D. Giarraputo, the founder and former publisher of Venture, the magazine for entrepreneurs, in 1987 joined forces with Carl G. Burgen, Stephan Spahn, H. Allen Fernald, and Paolo Panerai to start a magazine on financial...
TPG-Newbridge was named "Best Firm of the Year" by the Asia Venture Forum.
Notable Current and Former Employees
- Kevin Rollins
Kevin B. Rollins is an American businessman and philanthropist. The former President and CEO of Dell Computers, in 2006 Rollins was named by London's CBR as the 9th Most Influential person in the Enterprise IT sector....
- former President & CEO of Dell ComputersDell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
- Bernard Attali, former chairman of Air France
Air France , stylised as AIRFRANCE, is the French flag carrier headquartered in Tremblay-en-France, , and is one of the world's largest airlines. It is a subsidiary of the Air France-KLM Group and a founding member of the SkyTeam global airline alliance...
and brother of Jacques AttaliJacques Attali is a French economist, writer and senior civil servant.Former adviser to President François Mitterrand and first president of the European Bank for Reconstruction and Development, he founded the non-profit organization PlaNet Finance and was nominated President of the Commission for...
- Vivek Paul
Vivek Paul is an Indian-born businessman and founder of Akansa Capital, an India-focused Private Equity Fund. He is also a Consulting Professor of Radiology at Stanford University. Mr. Paul founded , a cloud software company in the enterprise social media space...
, former Vice Chairman of Wipro Technologies and CEO of its global information technology, product engineering, and business process services segments
- Mary Ma - Former CFO of Lenovo, and was listed in the top ten of the Fortune "50 Most Powerful Women" in 2005 and 2006.
External links