Leonard Green & Partners

Last updated
Leonard Green & Partners, L.P.
Company type Private
Industry Private equity
FoundedJanuary 7, 1989;36 years ago (1989-01-07)
Founder Leonard I. Green
Headquarters Los Angeles, California, United States
Products Leveraged buyout
AUM US$77.8 billion (2024)
Number of employees
87 (2024)
Website leonardgreen.com

Leonard Green & Partners, L.P. (LGP) is an American private equity investment firm founded in 1989 and based in Los Angeles. [1] The firm specializes in private equity investments. LGP has invested in over 95 companies since its inception, including Petco and The Container Store. [2] [3]

Contents

In June 2024, Leonard Green and Partners ranked 18th in Private Equity International's PEI 300 ranking among the world's largest private equity firms. [4]

History

Leonard Green was founded by Leonard I. Green in 1989 [5] after separating from Gibbons, Green and van Amerongen Ltd. (Gibbons Green), a bank which he had co-founded in 1969 with Edward Gibbons and Lewis van Amerongen. [6] [7] Leonard Green died in 2002, leaving the firm to be run by John G. Danhakl, Peter J. Nolan and Jonathan D. Sokoloff. [5]

The firm's predecessor, Gibbons Green, was among the earliest practitioners of the leveraged and management buyout. [6] [7] Gibbons Green purchased several companies, including Purex Industries in 1982, [8] Budget Rent a Car from Transamerica in 1986 and Kash n' Karry Food Stores in 1988. [6] [7] [9] The company planned to purchase Argonaut Group Inc. in 1987, but withdrew from the buyout. [10]

The dissolution of Gibbons Green and the formation of Leonard Green & Partners is attributed by some to the failure of two buyouts: Ohio Mattress Company and Sheller-Globe Corporation. [11] [12] [13]

In 2007, LGP acquired 17% shares of Whole Foods Market in a PIPE investment deal, "one of the best investments in our firm’s history" according to firm manager Jonathan Sokoloff, because it enabled LGP to acquire J.Crew, BJ’s Wholesale Club and Jo-Ann Stores with the cash made from Whole Foods. [14]

In 2019, LGP named John Baumer and Evan Hershberg co-heads of the Jade Fund. [15]

In March 2020, partners at LGP committed to plans for a $10 million employee-assistance fund for employees of Leonard Green portfolio companies impacted by the COVID-19 pandemic. [16] [17]

Notable investments

CompanyYear acquiredSharesYear divestedSold toSources
Thrifty Payless 43%, owned with Kmart 1996 Rite Aid Corporation [18]
Leslie's Poolmart 1997 [19] [ better source needed ]
Petco 2000 [2] [ better source needed ]
The Container Store 2007 [3]
Whole Foods Market 200917% (PIPE investment)2011: 11 million shares sold (less than half of LGP's stake) [20] [14]
Jo-Ann Stores 2010 [21]
Prospect Medical Holdings 201061.3%2021 [22]
Shake Shack 2012 [23]
PureGym 2017 [24]
The Shade Store2018 [25]
WellSky (health tech)2020owned with TPG Capital [26]
Service Logic [27] [28]

In 2016, LGP closed Green Equity Investors VII, L.P. ("GEI VII"), with $9.6 billion of committed capital. [29] In 2019, LGP raised $14.75 billion for two new funds. [15]

In February 2021, ProPublica reported on a dispute between LGP and Rhode Island's regulators and legislators over LGP's divestment in Prospect Medical Holdings. [30] [31] Approval for LGP's attempted sale of its 60% stake in Prospect to its co-owners was held up by the Rhode Island attorney general, who, given the dire financial situation LGP was leaving the health system in, conditioned its approval on LGP placing $120-150 million in escrow to back up its two fiscally strained hospitals in the state. LGP had in 2018 initiated a dividend recapitalization which landed it and its investors $658.4 million in dividends and management fees, and the next year sold Prospect's real estate in three states to Medical Properties Trust for $1.386 billion, leaving it with long-term lease obligations of $1.3 billion. In response to the AG's conditions, LGP threatened to shut down the hospitals. The pressure of potential loss of healthcare services led the AG to lower the escrow obligation to $80 million while also requiring LGP to commit over $30 million to the system during the transition. [32]

References

  1. ↑ "Leonard Green & Partners, L.P.: Private Company Information – Bloomberg". www.bloomberg.com. Retrieved 2017-10-03.
  2. 1 2 "COMPANY NEWS; MANAGEMENT-LED GROUP TO BUY PETCO FOR $505 MILLION". New York Times. 2000-05-18. Retrieved 2013-12-10.
  3. 1 2 Hughes, Elaine (2007-07-02). "Private firm buys Container Store". Usatoday.Com. Archived from the original on 2007-07-05. Retrieved 2013-12-10.
  4. ↑ "2024 PEI 300 by Private Equity International - Infogram". infogram.com. Retrieved 2025-02-05.
  5. 1 2 Witkowsky, Christopher (2011-10-06). "Leonard Green changes terms amid fundraise". Private Funds CFO. Retrieved 2019-10-15.
  6. 1 2 3 "Gibbons, Green Separation". The New York Times. 1989-05-05. ISSN   0362-4331 . Retrieved 2019-12-06.
  7. 1 2 3 "Gibbons, Green Adept in Risky Field : Bicoastal Firm Becomes Major Player in Leveraged Buyouts". Los Angeles Times. 1986-09-07. Retrieved 2019-12-06.
  8. ↑ "Purex Merger Is Approved". The New York Times . 1982-08-12. Retrieved 2016-04-28.
  9. ↑ Smith, Denise L. (24 August 1988). "KASH N' KARRY BUYS MARKETS FROM KROGER". Orlando Sentinel. Retrieved 2019-12-06.
  10. ↑ Special (1987-12-23). "COMPANY NEWS; Gibbons Cancels Argonaut Buyout". The New York Times. Retrieved 2013-12-10.
  11. ↑ Bartlett, Sarah (1989-11-06). "Wall Street's Treacherous Side". The New York Times. Retrieved 2013-12-10.
  12. ↑ Bartlett, Sarah (1989-10-13). "Filing Discloses Dispute Over Sale of Sheller-Globe". The New York Times. Retrieved 2013-12-10.
  13. ↑ Published (1989-05-05). "Gibbons, Green Separation". The New York Times. Retrieved 2013-12-10.
  14. 1 2 Dowd, Kevin (2017-03-17). "This day in buyout history: LGP closes one of the most successful pre-crisis megafunds". PitchBook. Retrieved 2024-06-15.
  15. 1 2 Bunker, Ted (2019-12-09). "WSJ News Exclusive | Buyout Firm Leonard Green Raises Nearly $15 Billion for Two New Funds". Wall Street Journal. ISSN   0099-9660 . Retrieved 2020-02-19.
  16. ↑ Witkowsky, Chris (2020-03-19). "Leonard Green executives to form $10m employee-assistance fund". Buyouts. Retrieved 2020-07-21.
  17. ↑ "PE Daily: Leonard Green Partners Commit to Employee Assistance Funds | Crude Price Drop Dooms First Reserve Portfolio Company | KKR Defies Chaos" . Wall Street Journal. 2020-03-19. ISSN   0099-9660 . Retrieved 2020-07-21.
  18. ↑ "Rite Aid to buy rival chain - Oct. 14, 1996". money.cnn.com. Retrieved 2020-11-11.
  19. ↑ "LESLIE'S POOLMART TAKEN PRIVATE IN $140 MILLION DEAL – New York Times". The New York Times . 1997-06-13. Retrieved 2013-12-10.
  20. ↑ Paumgarten, Nick (2009-12-27). "Food Fighter". The New Yorker. ISSN   0028-792X . Retrieved 2024-06-15.
  21. ↑ "Leonard Green to buy Jo-Ann Stores for $1.6 billion". Reuters. 2010-12-23. Retrieved 2024-06-15.
  22. ↑ Batt, Rosemary; Appelbaum, Eileen; Katz, Tamar (July 9, 2024). "The Role of Public REITs in Financialization and Industry Restructuring" (PDF). Institute for New Economic Thinking. doi:10.36687/inetwp189. Archived from the original (PDF) on March 31, 2024. Retrieved September 2, 2024.
  23. ↑ Severson, Kim; De La Merced, Michael (29 January 2015). "Shake Shack, Born in a Park, Is Going Public With Big Dreams". DealBook. Archived from the original on 6 October 2019. Retrieved 2020-02-19.
  24. ↑ "Pure Gym sold to Leonard Green private equity house". www.ft.com. 3 November 2017. Retrieved 2024-06-15.
  25. ↑ Hirsch, Lauren (2018-08-09). "Private equity giant Leonard Green takes another chance on retail, buying online retailer Shade Store". CNBC. Retrieved 2018-08-17.
  26. ↑ Collins, Leslie (21 July 2020). "WellSky adds Leonard Green as new majority stakeholder". Kansas City Business Journal.
  27. ↑ Cutchin, James (5 November 2020). "Leonard Green Acquires Service Logic | Los Angeles Business Journal". Los Angeles Business Journal. Retrieved 2020-11-09.
  28. ↑ Bunker, Ted (2020-10-15). "Leonard Green Emerges as Buyer for Warburg's Service Logic". Wall Street Journal. ISSN   0099-9660 . Retrieved 2020-11-09.
  29. ↑ "Leonard Green and Partners | Leading private equity investment firm based in Los Angeles". www.leonardgreen.com. Retrieved 2017-09-07.
  30. ↑ Elkind, Peter (February 4, 2021). "Rich Investors Stripped Millions From a Hospital Chain and Want to Leave It Behind. A Tiny State Stands in Their Way". ProPublica . Retrieved February 7, 2021.
  31. ↑ Elkind, Peter; Burke, Doris (September 30, 2020). "Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn't Pay for Medical Supplies or Gas for Ambulances". ProPublica . Retrieved February 7, 2021.
  32. ↑ Batt, Rosemary; Appelbaum, Eileen; Katz, Tamar (July 9, 2024). "The Role of Public REITs in Financialization and Industry Restructuring" (PDF). Institute for New Economic Thinking. doi:10.36687/inetwp189. Archived from the original (PDF) on March 31, 2024. Retrieved September 2, 2024.
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