Best / Worst PE deals of all time?
Saw that Staple Street was going to get a huge windfall on Dominion and wanted to know what other deals in PE history were particularly notable? Some that come to mind are Cortec/Yeti (25x), KPS/Taylormade (7x+), Tommy Lee/Snapple (idk MOIC but must’ve been $1Bn+ gain on a $28mm check). What else?
On the opposite side, TXU, Samson, and a bunch of other energy deals look like total shitshows. Also TPG/WaMu, KKR/Envision, and many others.
Some of the worst: Madison Dearborn (Univision), Fortress (Florida East Coast), most things Oaktree touches
lol someone got rejected by Oaktree
Isn't Oaktree supposed to be one of the best around, especially in private credit? What happened?
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https://www.pehub.com/how-ta-turned-90m-into-6-12bn-on-zoominfo/#:~:tex….
Might have to update that mark for ZI performance in the last year (yes I realize they distributed shares to LPs already)
Cerberus/Chrysler
Best: HCA (1.2B on 64M for Bain Capital)
Silver Lake’s history with Dell/EMC/VMware is pretty epic
KKR fucked up Envision pretty royally
On the other side, CHI was a 10x deal for KKR which is pretty solid at that scale of equity check
https://verdadcap.com/archive/the-genius-of-search-funds
yeti all time deal
Francisco / Trellis Rx & CD&R / Agilon Health are a few HC focused that come to mind as big winners
In defense of Oaktree, they made 23x MOIC on a $100M investment in AdvancePierre
HIG Capital has a crazy track record of like 50+ investments with MOIC >8x MOIC, and I've heard one was >70x MOIC
Cortec made a killing on Groundworks. Recently sold to KKR for a huge multiple
Gridiron is going to return their entire fund with Leaf Home
Bain/GS/TPG made ~8x MOIC on Burger King, and then 3G Capital made another ~8-10x MOIC on the same company
I saw some of HIG’s pitch deck materials and can confirm how many ridiculously profitable deals (and funds generally) they’ve had. I can only think of one or two shops i’ve seen with anything remotely similar. And i’ve seen full track records for a large majority of the major shops people talk about here.
Which other funds would rank up there at the top in your view?
EQT / AutoStore
Thoma / Ellie Mae was >10x in less than a year
I thought AutoStore was more of a THL play? Regardless, both firms made a lot of money selling to SoftBank and the IPO was massive (if not short-lived).
Alpine has a number of 10-15x+ deals, with the most recent generating a 100%+ IRR, 2x the fund, when it exits via a GP led
Three Delta and Four Seasons HC comes to mind as one of the crappiest in Europe
I'd recommend the book: The Debt Trap - a book dedicated to PE basket cases!
Apollo buyout of Caesars entertainment group was such a shit show that a book was written about it. Incredible story and great book about how dirty PE can get. PS: David Sambur should consider a career in comedy if he gets bored of insulting opposing parties.
The book is fantastic, but not sure it belongs in the conversation for worst wipeout. The equity check size is certainly there at >$5bn, but they did a great job squeezing a ton of option value out of the investment (put another way, quasi-fraudulent conveyance out of OpCo).
Was it a net loss for Apollo?
While earlier stage, SoftBank’s Alibaba deal has to be part of the conversation of total gains. The stock is well off the highs and SoftBank has sold shares along the way, but at one point I think paper profit was over $150 billion on a $20 million investment. On the other side of the coin, WeWork and others could be in the running for worst deal.
Archimed (French Healthcare MM) made 300x with Polyplus this month
https://www.privateequityinternational.com/archimed-scores-300x-return-…
Blackstone’s purchase of Hilton is up there, esp. when looking at total profit $s
https://www.sbs.ox.ac.uk/sites/default/files/2018-07/hilton-new-waterma…
This is the deal I thought of first when reading the OP.
3i's investment in Action might be #1, definitely is in top 5.
For reference the deal is at least a 30x for them, they bought at $200m enterprise value and it’s reportedly over $10bn in enterprise value now, though unclear how much money they put in / took out.
Guy hands / terra firma / EMI single-handedly destroyed his fund and legacy forever
Conversely, Annington has been one of his best.
KKR and ToysRUs?? We talk about these as just investments and deals, but real jobs, livelihoods, and communities get destroyed when investments sour as well.
I may be bias as I grew up in Asia, but KKR/Affinity Equity and OB was a game changer both in Korea and the region. Super star deal that catapulted many folks’ careers.
OB was a monster deal and singlehandedly injected tons of credibility in the asset class in the region, despite it being (just?!) a high single digit return iirc. Legend has it that Henry Kravis himself had to call the lending banks to make them agree to the leverage package, which was the highest of the bidders and reportedly won them the deal.
Can anyone shed some light on why the Envision deal has gone so bad for KKR?
Regulatory issues (no surprises act) cut their revenue overnight for out of network billing in addition to billing disputes with United before that. Business was generally over earning before. Momtazee went and raised $4bn after that deal, GenesisCare, and Air Medical so doing just fine despite some pain.
The first lien in the 60s is considered "some pain?"
Air Medical definitely in deep shit
Underlying business model changed completely due to new regulations, KKR did some very creative restructuring to try to save ship, ended up having to restructure again and the company ended up in Chapter 11 and the 3bn equity check is completely wiped.
This is a great read on it.
Probably TPG / Washington Mutual (2008). Wiped out $1.35bn of equity in 5 months.
From reuters:
Sun Capital has few deals with crazy IRRs/MOICs for companies they bought for pennies and sold for something. I am generally more impressed by funds that can do both high IRRs/MOICs and a large Net Gain (i.e. the initial deal was sizeable).
TPG acquiring MEMC (now Sun Edison) for $6 and debt was insane.
LGP - Mister Car Wash. 12 bagger
Stock down massively and they didn't fully sell. Still a good deal but nowhere near 12 now
Yep - and no signs car wash is going to get better anytime soon.
apollo / len blavatnik and lyondellbasell. iirc apollo returned 5-6x their equity, $9B+ profit
love this
Nice deal, but I think you need to be north or well north of 10x to make the cut. The thread should clarify if total $ or MOIC is the threshold.
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I have the book The Debt Trap, and had a flick through, list of the worst:
Vintage / Rent-A-Center has to be one of worst (non)-deals of all time.
Vintage had to pay a $92.5 million breakup fee because they forgot to send an email extending the closing date - truly an all time F up.
Link to an article referencing this? Couldn’t find.
Surprised no one has mentioned RJR Nabisco.
Not really a specific deal or true buyout PE, but Catalyst Capital (Canada) has a hilarious record of derping hard
Unsurprisingly a couple of their funds were disasters especially given relatively massive sizes for Canada
If you want read some crazy stories, just Google their founder.
Whos founder?
First Reserve lost 1bn on a coal plant, Longview power I think it was called.
Arclight lost 1bn on a refinery in the carribean.
this is common in energy!
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