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 boom, completing some of the largest transactions in this period.
Investment | Year | Company Description | Ref. |
Neiman Marcus | 2005 | TPG, together with Warburg Pincus acquired Neiman Marcus Group, the owner of luxury retailers Neiman Marcus and Bergdorf Goodman, in a $5.1 billion buyout in May 2005. | |
Freescale Semiconductor | 2006 | TPG together with The Blackstone Group, The Carlyle Group and Permira 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 SunGard. | |
Harrah's Entertainment | 2006 | On December 19, 2006, TPG and Apollo Management announced an agreement to acquire the gaming company for $27.4 billion, including the assumption of existing debt. | |
Sabre Holdings | 2006 | TPG and Silver Lake Partners announced a deal to buy Sabre Holdings, which operates Travelocity, Sabre Travel Network and Sabre Airline Solutions, 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 Travelport. | |
Univision Communications | 2006 | A consortium of TPG, Madison Dearborn Partners, Providence Equity Partners, Thomas H. Lee Partners and Haim Saban (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 Partners 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. | |
Avaya | 2007 | TPG and Silver Lake Partners completed an $8.2 billion leveraged buyout of the enterprise telephony and call center technology company that was formerly a unit of Lucent Technologies | |
Biomet | 2007 | TPG, The Blackstone Group, Kohlberg Kravis Roberts and Goldman Sachs Capital Partners acquired the medical devices company for $11.6 billion. | |
First Data | 2007 | TPG and Kohlberg Kravis Roberts completed the $29 billion buyout of the credit and debit card payment processor and former parent of Western Union. Michael Capellas, previously the CEO of MCI Communications and Compaq was named CEO of the privately held company. | |
Midwest Air Group | 2007 | On August 12, 2007 Agreed to purchase Midwest Air Group and its subsidiaries including Midwest Airlines ending the hostile takeover attempt by AirTran Airways. Northwest Airlines 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 Holdings to avoid bankruptcy. Republic took over Midwest's fleet. Eventually TPG sold the company to Republic for $31 million. | |
Surgical Care Affiliates | 2007 | In June 2007, TPG completed the carveout of HealthSouth Corporation's ambulatory surgery business for $920 million | |
TXU | 2007 | An investor group, led by TPG and Kohlberg Kravis Roberts, and together with Goldman Sachs Capital Partners completed the $44.37 billion buyout of the regulated utility and power producer. The investor group had to work closely with ERCOT regulators to gain approval of the transaction but had significant experience with the regulators from their earlier buyout of Texas Genco. TXU is the largest buyout in history, and retained this distinction when the announced buyout of BCE failed to close in December 2008. The deal is also notable for a drastic change in environmental policy for the energy giant, in terms of its carbon emissions from coal power plants and funding alternative energy. |
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 Capital.
Read more about this topic: TPG Capital, History and Notable Investments
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