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Founding
Texas Pacific Group, later TPG Capital, was founded in 1992 by David Bonderman, James Coulter and William S. Price III. Prior to founding TPG, Bonderman and Coulter had worked for Robert M. Bass, making leveraged buyout investments during the 1980s.
In 1993, Coulter and Bonderman partnered with GE Capital vice president of strategic planning and business development William S. Price III to complete the buyout of Continental Airl Texas Pacific Group, later TPG Capital, was founded in 1992 by David Bonderman, James Coulter and William S. Price III. Prior to founding TPG, Bonderman and Coulter had worked for Robert M. Bass, making leveraged buyout investments during the 1980s.
In 1993, Coulter and Bonderman partnered with GE Capital vice president of strategic planning and business development William S. Price III to complete the buyout of Continental Airlines.[8] The plan included bringing in a new management team, improving aircraft utilization and focusing on lucrative routes.[citation needed]
In June 1996, TPG acquired the AT&T Paradyne unit, a multimedia communications business, from Lucent Technologies for $175 million.[9] Also in 1996,[citation needed] TPG invested in Beringer Wine, Ducati Motorcycles and Del Monte Foods.[10]
In 1997, TPG raised over $2.5 billion for its second private equity fund. TPG's most notable investment that year was its takeover of the retailer J. Crew, acquiring an 88% stake for approximately $500 million;[11] the investment struggled due to the high purchase price paid relative to the company's earnings.[12] The company was able to complete a turnaround, beginning in 2002, and to complete an IPO in 2006.[13]
In 1998, TPG led a minority investment in Oxford Health Plans. TPG and its co-investors invested $350 million in a convertible preferred stock that can be converted into 22.1% of Oxford shareholding.[14] The company completed a buyback of TPG's PIPE convertible in 2000, which would ultimately be acquired by UnitedHealt In 1993, Coulter and Bonderman partnered with GE Capital vice president of strategic planning and business development William S. Price III to complete the buyout of Continental Airlines.[8] The plan included bringing in a new management team, improving aircraft utilization and focusing on lucrative routes.[citation needed]
In June 1996, TPG acquired the AT&T Paradyne unit, a multimedia communications business, from Lucent Technologies for $175 million.[9] Also in 1996,[citation needed] TPG invested in Beringer Wine, Ducati Motorcycles and Del Monte Foods.[10]
In 1997, TPG raised over $2.5 billion for its second private equity fund. TPG's most notable investment that year was its takeover of the retailer J. Crew, acquiring an 88% stake for approximately $500 million;[11] the investment struggled In 1997, TPG raised over $2.5 billion for its second private equity fund. TPG's most notable investment that year was its takeover of the retailer J. Crew, acquiring an 88% stake for approximately $500 million;[11] the investment struggled due to the high purchase price paid relative to the company's earnings.[12] The company was able to complete a turnaround, beginning in 2002, and to complete an IPO in 2006.[13]
In 1998, TPG led a minority investment in Oxford Health Plans. TPG and its co-investors invested $350 million in a convertible preferred stock that can be converted into 22.1% of Oxford shareholding.[14] The company completed a buyback of TPG's PIPE convertible in 2000, which would ultimately be acquired by UnitedHealth Group, in 2004.[15]
In 1999, TPG invested in Piaggio S.p.A, Bally International (including Bally Shoe), and ON Semiconductor. T3 Partners was started in 2001 to invest alongside the main fund in technology-oriented investments.[citation needed]
In 2000 TPG and Leonard Green & Partners invested $200 million to acquire Petco, the pet supplies retailer as part of a $600 million buyout.[16] Within two years they sold most of it in a public offering that valued the company at $1 billion. Petco’s market value greatly increased by the end of 2004 and the firms would ultimately realize a gain of $1.2 billion. Then, in 2006, the private equity firms took Petco private again for $1.68 billion.[17]
In 2000, TPG completed the controversial acquisition of Gemplus SA, a smart card manufacturer. TPG won a struggle with the company's founder, Marc Lassus, for control of the company.[18] Also in 2000, TPG completed In 2000, TPG completed the controversial acquisition of Gemplus SA, a smart card manufacturer. TPG won a struggle with the company's founder, Marc Lassus, for control of the company.[18] Also in 2000, TPG completed an investment in Seagate Technology.
In 2001, TPG acquired Telenor Media, a Norwegian phone-directory company, for $660 million, and shortly thereafter acquired a controlling interest in silicon-wafer maker MEMC Electronic Materials.[19]
In July 2002, TPG, together with Bain Capital and Goldman Sachs Capital Partners, announced the $2.3 billion leveraged buyout of Burger King from Diageo.[20] However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, TPG and its co-investors agreed on a reduced $1.5 billion purchase price for the investment.[21] The TPG consortium had support from Burger King's franchisees, which controlled approximately 92% of Burger King restaurants at the time of the transaction. Under its new owners, Burger King underwent a brand overhaul including the use of The Burger King character in advertising. In February 2006, Burger King announced plans for an initial public offering.[22]
In November 2003, TPG provided a proposal to buy Portland General Electric from Enron. However, concerns about debt and local politics led to Oregon's Public Utilities Commission regulators to deny permission for the purchase on March 10, 2005.[23]
TPG entered the film production business in late 2004, in the major leveraged buyout of Metro-Goldwyn-Mayer. A consortium led by TPG and Sony completed the $4.81 billion buyout of the film studio. The consortium also included media-focused firms Providence Equity Partners and Quadrangle Group, as well as DLJ Merchant Banking Partners.[24] The transaction was announced in September 2004, TPG entered the film production business in late 2004, in the major leveraged buyout of Metro-Goldwyn-Mayer. A consortium led by TPG and Sony completed the $4.81 billion buyout of the film studio. The consortium also included media-focused firms Providence Equity Partners and Quadrangle Group, as well as DLJ Merchant Banking Partners.[24] The transaction was announced in September 2004, and completed in early 2005.[citation needed]
Also in 2005, TPG was involved in the buyout of SunGard in a transaction valued at $11.3 billion. TPG's partners in the acquisition were Silver Lake Partners, Bain Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and Blackstone Group. This represented the largest leveraged buyout completed since the takeover of RJR Nabisco at the end of the 1980s leveraged buyout boom. At the time of its announcement, SunGard would be the largest buyout of a technology company in history, a distinction later ceded to the buyout of Freescale Semiconductor. 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.[25][26]
On 15 May 2006, Smurfit-Stone reported the definitive sale for $1.04 billion in cash of its consumer packaging division to the Texas Pacific Group.[27]
In early 2006, as TPG was completing fundraising for its fifth private equity fund, co-founder Bill Price announced that he would reduce his work at the firm.[28]
On December 1, 2006, it was announced TPG and Kohlberg Kravis Roberts had been exploring the possibility of a $100 billion leveraged buyout of Home Depot.[29]
Texas Pacific Group in the late 1990s