A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The use of debt, which normally has a lower cost of capital than equity, serves to reduce the overall cost of financing the acquisition. This is done at the risk of magnified cash flow losses should the acquisition perform poorly after the buyout.
The R. J. Reynolds Tobacco Company (RJR) is an American tobacco manufacturing company based in Winston-Salem, North Carolina, and headquartered at the RJR Plaza Building. Founded by R. J. Reynolds in 1875, it is the second-largest tobacco company in the United States. The company is a wholly owned subsidiary of Reynolds American, after merging with the U.S. operations of British American Tobacco in 2004.
Nabisco is an American manufacturer of cookies and snacks headquartered in East Hanover, New Jersey. The company is a subsidiary of Illinois-based Mondelēz International.
Premier was an American brand of smokeless cigarettes which was owned and manufactured by the R.J. Reynolds Tobacco Company (RJR). Premier was released in the United States in 1988. It was the first commercial heated tobacco product. However, it was difficult to use and tasted unpleasant; as a result, it was unpopular with consumers. A commercial failure, the brand was a significant financial loss for RJR and was quickly taken off the market.
R. J. Reynolds Nabisco, Inc., doing business as RJR Nabisco, was an American conglomerate, selling tobacco and food products, headquartered in the Calyon Building in Midtown Manhattan, New York City. R. J. Reynolds Nabisco stopped operating as a single entity in 1999. Both RJR and Nabisco still exist.
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds. As of December 31, 2023, the firm had completed more than 730 private equity investments in portfolio companies with approximately $710 billion of total enterprise value. As of December 31, 2023, assets under management (AUM) and fee paying assets under management (FPAUM) were $553 billion and $446 billion, respectively.
Henry R. Kravis is an American businessman, investor, and philanthropist. He is a co-founder of KKR & Co. Inc.
Forstmann, Little & Company was a private equity firm, specializing in leveraged buyouts (LBOs). At its peak in the late 1990s, Forstmann Little was among the largest private equity firms globally. Ultimately, the firm would suffer from the bursting of the internet and telecom bubbles, having invested heavily in technology and telecommunications companies. Following the death of the last surviving founder, Theodore Forstmann, in 2011, the firm was dissolved and its assets sold off. It closed in May 2014.
Theodore Joseph Forstmann was one of the founding partners of Forstmann Little & Company, a private equity firm, and chairman and CEO of IMG, a global sports and media company. A billionaire, Forstmann was a Republican and a philanthropist. He supported school choice and funded scholarship programs for the disadvantaged. He led a tour of refugee camps in the former Yugoslavia.
Nicholas Curt "Nick" Forstmann was one of the founding partners of Forstmann Little & Company, a private equity firm.
James Dixon Robinson III was an American businessman best known for his position as the chief executive officer of American Express Co. from 1977 until his retirement in 1993.
Frederick Ross Johnson, OC was a Canadian businessman, best known as the chief executive officer of RJR Nabisco in the 1980s.
Peter Riegert is an American actor. He is best known for his roles as Donald "Boon" Schoenstein in Animal House (1978), oil company executive "Mac" MacIntyre in Local Hero (1983), pickle store owner Sam Posner in Crossing Delancey (1988) and Lt. Mitch Kellaway in The Mask (1994). He directed the short film By Courier (2000), for which he was nominated along with producer Ericka Frederick for the Academy Award for Best Live Action Short Film.
The history of private equity, venture capital, and the development of these asset classes has occurred through a series of boom-and-bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.
Private equity in the 1980s 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.
Bryan Burrough is an American author and correspondent for Vanity Fair. He has written six books. Burrough was a reporter for The Wall Street Journal in Dallas, Texas, between 1983 and 1992. He has written for Vanity Fair since 1992. While reporting for The Wall Street Journal, he won the Gerard Loeb Award for excellence in financial journalism three times. Burrough has written a number of book reviews and op-ed articles for publications such as The New York Times, Los Angeles Times, and The Washington Post. He has also made appearances on Today, Good Morning America, and many documentaries.
Peter A. Cohen is the chairman and CEO of Andover National Corporation, a public holding company. He was formerly the chairman and CEO of Cowen Inc., also known as Cowen & Company now TD Cowen. Prior to his current role, Cohen founded Ramius Capital Management in 1994, a $13 billion investment firm, which he merged with Cowen Inc. in 2009. Prior to this, Cohen was the chairman and chief executive officer of Shearson Lehman American Express from 1983 through 1991.
Barbarians at the Gate: The Fall of RJR Nabisco is a 1989 book about the leveraged buyout (LBO) of RJR Nabisco, written by investigative journalists Bryan Burrough and John Helyar. The book is based upon a series of articles written by the authors for The Wall Street Journal. The book was made into a 1993 made-for-TV movie by HBO, also called Barbarians at the Gate. The book centers on F. Ross Johnson, the CEO of RJR Nabisco, who planned to buy out the rest of the Nabisco shareholders.
John Helyar is an American journalist and author. He is a graduate of Boston University. He is married to The Wall Street Journal’s Betsy Morris. Helyar has worked for The Wall Street Journal, Fortune magazine, ESPN.com, ESPN The Magazine and Bloomberg News. He is the author of the 1994 book, Lords of the Realm: The Real History of Baseball.
Derald H. Ruttenberg was a lawyer who became a deal maker, organizing large industrial mergers. He arranged the merger of Studebaker and Worthington Corporation, and for some time ran the combined Studebaker-Worthington. He provided the financing for the Derald H. Ruttenberg Cancer Center at Mount Sinai Hospital, New York.
