Investments
GS Capital Partners emerged in the late 1990s as one of the largest private equity investors globally competing and partnering with the largest independent firms, Kohlberg Kravis Roberts, The Blackstone Group, Bain Capital, The Carlyle Group and TPG Capital. Since the raising of its Goldman Sachs Capital Partners 2000 Fund, GS Capital Partners has completed some of the most notable leveraged buyouts:
| Investment | Year | Company Description | Ref. |
| Burger King | 2002 | In July 2002, GS Capital Partners, together with TPG Capital and Bain Capital, announced the high profile $2.3 billion leveraged buyout of Burger King from Diageo. However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, the consortium agreed on a reduced $1.5 billion purchase price for the investment. The 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. | |
| SunGard | 2005 | GS Capital Partners was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. GSCP's partners in the acquisition were Silver Lake Partners, Bain Capital, TPG Capital, 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. | |
| Alltel Wireless | 2007 | GS Capital Partners and TPG Capital 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, Goldman and TPG agreed to sell Alltel to Verizon for slightly more than it had paid for the company amidst a deteriorating economic outlook. | |
| Biomet | 2007 | GS Capital Partners, The Blackstone Group, Kohlberg Kravis Roberts, and TPG Capital acquired the medical devices company for $11.6 billion. | |
| TXU | 2007 | An investor group of GS Capital Partners, Kohlberg Kravis Roberts and TPG Capital 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 addition to its successful buyout transactions, Goldman was involved in the high profile failed buyout of Harman International Industries, an upscale audio equipment maker. On April 26, 2007, Harman announced it had entered an agreement to be acquired by GS Capital Partners and Kohlberg Kravis Roberts. As the financing markets became more adverse in the summer of 2007, the buyout was on tenuous ground. In September 2007, Goldman and KKR backed out of the $8 billion buyout of Harman. By the end of the day, Harman's shares had plummeted by more than 24% on the news.
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“In youth, love and art. In age, investments and antiques.”
—Mason Cooley (b. 1927)