Private equity pioneer Thomas Lee dies at 78

Thomas H. Lee, the billionaire who pioneered private equity transactions and share buybacks through the firm that bore his name, has died. He was 78 years old.

Lee’s death was announced without details of her time, place, or cause by family spokesman Michael Sitric.

Lee ran the Boston-based Thomas H. Lee Partners from 1974 to 2006, when the firm had $12 billion to invest after generating triple-figure earnings from some of its deals. Lee quit his job and founded Lee Equity Partners in New York, which created funds focused on smaller transactions for high-growth companies.

Through both firms, Lee has invested over $15 billion in hundreds of transactions as of 2020. This included his most famous deal, the purchase of Snapple Beverage Corp. in 1992. After his firm bought Snapple for $135 million, investing only two years later, Lee sold it to Quaker Oats Co. for $1.7 billion, increasing revenue from $95 million a year to $750 million.

His Snapple return on equity was 334% after his firm generated $927 million from the sale, according to a 1997 Forbes profile. With those profits, Lee was worth $2 billion by 2022, according to Forbes.

Unlike most of his competitors, Lee was not ruthless in how he made his fortune, avoiding corporate raiding tactics such as radical spending cuts to meet profit targets.

“He’s a rare thing on Wall Street – a really nice guy,” Forbes wrote in a 1997 profile. “He is also a true innovator in the transaction business.”

‘Cult FIGURE’

Todd Abbrecht and Scott Sperling, co-CEOs of Lee’s former firm, now known as THL, said they were “deeply saddened” by his unexpected death.

“Tom was an iconic figure in the private equity industry. He helped create the industry and nurtured generations of young professionals to follow in his footsteps,” the company said in a statement. “More importantly, he was a generous and gracious man who cared deeply for his friends, his family, and his community.”

Lee’s approach to private equity was to target mid-cap companies with growth potential that were between $300 billion and $3 billion in revenue. One of his favorite aphorisms was: “It is better to pay a high price for a great company than to get a mediocre company at a bargain price.”

[More: Hightower lands additional funding from Thomas H. Lee Partners]

Using this philosophy, one of his first successes was the 1985 acquisition of Sterling Jewelers of Akron, Ohio for $28 million, much of it on loan. According to Forbes, he sold the company two years later for $210 million, making over $180 million in profits.

Other deals at his first firm included General Nutrition Cos. in 1989. In 2005, he also partnered with other private equity firms to buy Dunkin’ Brands, which has franchised Dunkin’ Donuts and Baskin-Robbins ice cream shops, for $2.4 billion.

INVESTMENT FORMULA

Leveraging too much, Lee stayed with his basic investment formula when he founded Lee Equity, which typically invested between $50 million and $150 million in the company. He invested in Deb Shops, a teen fashion retailer, bought out Edelman Financial Group in 2012, and made a big bet on Papa Murphy’s International, a take-out and bakery pizza chain.

According to Edgar Bronfman, Jr., who worked with Lee to buy Warner Music Group in 2004, Lee often kept a low profile when the deals were announced. . Let the other side have social and press victories.

“Tom has always focused on business results for his investors, not his personal profile,” Bronfman told Bloomberg in 2014.

There were some pitfalls along the way, which Lee usually pointed out to potential investors when he made a new deal offer. A $500 million investment in 1999 in insurance company Conseco Inc. soured when she filed for bankruptcy protection three years later.

Lee’s firm was also rocked by a $507 million investment in Refco Inc., a US futures and commodities brokerage firm. Refco filed for bankruptcy protection after revealing in 2005 that its chief executive had hidden a $430 million debt for years.

Lee was often seen munching a cigar in the office and was sometimes compared to the fictional banker and wealth manager Thomas Crown, depicted in the 1999 film The Thomas Crown Case, Businessweek reported in 2005.

An avid art collector, Lee owned works by artists such as Willem de Kooning and Jackson Pollock, and was a trustee of Lincoln Center and the Museum of Modern Art, according to Forbes.

Thomas Haskell Lee was born on March 27, 1944 in Washington DC to Herbert and the former Mildred Schiff. His father worked for Shoe Corp. of America founded by his father-in-law Robert Schiff.

Lee attended Belmont Hill School near Boston and graduated from Harvard College in 1965 with a bachelor’s degree in economics.

He went to work as an analyst at LF Rothschild’s department of institutional studies in New York. A year later, he moved to the First National Bank of Boston, where he spent eight years. By 1973, he had risen to vice president, specializing in lending to technology firms.

Using $150,000 from an inheritance and a loan from his brother, he founded Thomas H. Lee Partners in 1974.

His first wife was Barbara Fish. They divorced in 1995 after having two children, Zach and Robbie, over 27 years of marriage. He later married Ann Tenenbaum. They had three children: Jessie, Nathan and Rosalie.

Content Source

News Press Ohio – Latest News:
Columbus Local News || Cleveland Local News || Ohio State News || National News || Money and Economy News || Entertainment News || Tech News || Environment News

Related Articles

Back to top button