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Golden Gate Capital

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Golden Gate Capital
Company typePrivate
IndustryPrivate equity
Founded2000; 24 years ago (2000)
FounderDavid Dominik, et al
HeadquartersOne Embarcadero Center, San Francisco, California, United States
ProductsLeveraged buyout, growth capital
AUM$15+ billion[1]
Number of employees
75[2]
Websitewww.goldengatecap.com

Golden Gate Capital is an American private equity firm based in San Francisco. The firm makes investments in a number of select industries, including technology, financial services, retail and industrial, through leveraged buyout transactions, as well as significant minority purchases and growth capital investments. As of April 2018, it had over $15 billion in assets under management.[1]

The firm was founded in 2000 by former investment professionals from private equity firm Bain Capital and its affiliate, Bain & Company, led by former Bain Capital partner David Dominik.[3]

Golden Gate's investment fund is structured as an evergreen fund with no finite life, meaning Golden Gate does not have to sell all investments within five to 10 years in order to raise another fund and can instead fund-raise as deals are made.[4]

As of 2017, the firm had approximately 54 investment professionals.[2]

Holdings

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Following the bursting of the Dot-com bubble, the firm had shown a pattern of investments in technology companies that may have been distressed by the Great Recession in the United States at that time.[citation needed]

In 2006, it bought Neways International for $500 Million, acquiring the company at an auction held by the divorce court. A prior $700 million transaction, led by Ramy El-Batrawi, had been abandoned, due to feuding between the divorcing couple that owned Neways International, each of whom were convicted, the previous year, on "six counts of income tax evasion and a conspiracy to defraud the IRS", and sentenced to more than two years in prison.[5] Ramy El-Batrawi died of unknown causes on April 23, 2024.[6]

On May 15, 2007, Limited Brands announced its intent to sell a 67% stake in Express to Golden Gate Capital Partners. When the sale was finalized, in July 2007, Golden Gate's stake in the company was 75% for approximately $550 Million, instead of the announced 67%.[citation needed]

Through its unit, Mac Acquisition LLC, in 2008, the firm acquired a majority stake in the Romano's Macaroni Grill restaurant chain for $131 Million. In October 2017, Mac Acquisition LLC filed for Chapter 11 bankruptcy protection, from which it was able to emerge in February 2018.[7]

In June 2009, the company announced the purchase of the J.Jill brand business from Talbots.[8] In April 2011, the Bahrain-based private equity firm Arcapita bought Jill Acquisitions from Golden Gate.[9]

In 2011, it acquired California Pizza Kitchen.[10] The company declared bankruptcy in July 2020, seeking to reduce its debt load and close locations, during the midst of the COVID-19 pandemic.[11]

On October 9, 2012, Wolverine World Wide, Golden Gate Capital and Blum Capital acquired Collective Brands.[12]

On July 28, 2014, Golden Gate completed the purchase of Red Lobster from Darden Restaurants, for $2.1 billion.[13] The firm has been criticized for its handling of Red Lobster; Golden Gate was accused of "asset stripping" by selling off Red Lobster's real estate, which Golden Gate in turn kept as profit rather than a reinvestment into the restaurant chain.[14] Red Lobster filed for Chapter 11 bankruptcy in May 2024.[15]

In November 2014, Golden Gate Capital agreed to buy Angus Chemical Co. and its Sterlington plant from Dow Chemical, for $1.215 billion.[16]

In May 2015, the company backed Philip P. Gass and Kostas Cheliotis with $750 million for a reinsurance company.[17] That month, Golden Gate Capital, with Arcapita Bank, also sold its J.Jill retail holdings to TowerBrook.[18][19]

In September 2016, the company acquired lifestyle clothing brand PacSun, after the retailer completed Chapter 11 bankruptcy.[20]

In January 2017, the company purchased the Bob Evans Restaurants division from Bob Evans Farms, for $565 million.[21] On August 8, 2017, Golden Gate Capital finalized the acquisition of Neustar, Inc., previously NSR, a publicly traded company.[citation needed]

In June 2018, the company announced that it had established a new operating company, PSEB Group. PSEB is composed of two Golden Gate portfolio companies: Eddie Bauer and Pacific Sunwear of California.[22] In July, Golden Gate Capital announced that it had acquired The Learning Experience, one of the nation's largest and fastest-growing academies of early education and child care providers.[23] In November, Golden Gate Capital announced that it had acquired Vector Solutions of Tampa from Providence Equity Partners, for an undisclosed sum.[24]

In September 2019, Golden Gate Capital acquired autism and childhood behavioral health services provider, Invo Holding, LLC, for an undisclosed amount.[25][26] In November, the firm sold Hillstone Environmental Partners, which it had co-founded in 2015 as a de novo investment, in a partnership with Hillstone CEO and co-founder Jay Parkinson. NGL Energy Partners acquired the Central Delaware Basin water pipeline and disposal infrastructure company for approximately US$600 million.[27]

References

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  1. ^ a b Golden Gate Capital
  2. ^ a b "Archived copy". Archived from the original on 2017-11-16. Retrieved 2017-04-29.{{cite web}}: CS1 maint: archived copy as title (link)
  3. ^ de la Merced, Michael J. (October 28, 2011). "Golden Gate Capital Closes $3.5 Billion Fund". The New York Times. Retrieved June 1, 2020.
  4. ^ Dai, Shasha (16 October 2014). "5 Things to Know About Golden Gate Capital". Blogs.wsj.com. Retrieved 8 January 2018.
  5. ^ Leong, Grace (November 9, 2006). "Neways sold to private equity firm". Daily Herald.
  6. ^ "Ramy El-Batrawi Died in L.A." Hollywood LA News. 2024-04-24. Retrieved 2024-04-24.
  7. ^ Klein, Danny (February 2018). "Romano's Macaroni Grill Emerges from Bankruptcy". FSRmagazine.com. Retrieved June 1, 2020.
  8. ^ "Paying the Price for J. Jill". Multichannelmerchant.com. July 1, 2009. Retrieved 2010-09-14.
  9. ^ CIT Provides Financing for J. Jill Acquisition - Bloomberg.com Archived 2012-03-30 at the Wayback Machine. Origin-www.bloomberg.com. Retrieved on 2014-05-23.
  10. ^ "Press Release: California Pizza Kitchen to Be Acquired by Golden Gate Capital; Stockholders to Receive $18.50 in Cash Per Share" (PDF). Info.cpk.com. Archived from the original (PDF) on 4 March 2016. Retrieved 8 January 2018.
  11. ^ Maze, Jonathon. "CALIFORNIA PIZZA KITCHEN DECLARES BANKRUPTCY". restaurantbusinessonline.com. Restaurant Business. Retrieved 13 August 2020.
  12. ^ "Wolverine Worldwide, Golden Gate Capital and Blum Capital complete acquisition of Collective Brands". Golden Gate Capital.
  13. ^ "Darden Completes Sale Of Red Lobster To Golden Gate Capital". MarketWatch. Retrieved August 26, 2014.
  14. ^ Morgenson, Gretchen (May 24, 2024). "How private equity rolled Red Lobster". NBC News. Archived from the original on 2024-05-24. Retrieved May 26, 2024.
  15. ^ "Red Lobster files for bankruptcy, but restaurants will stay open". NBC News. 2024-05-20. Retrieved 2024-07-18.
  16. ^ Hilburn, Greg (November 12, 2014). "Dow sells ANGUS to private equity firm". The News-Star.
  17. ^ Buhayar, Noah (13 May 2015). "Golden Gate Capital Backs Gass in $750 Million Reinsurance Push". Bloomberg. Retrieved 10 September 2015.
  18. ^ Farrell, Maureen (April 8, 2016). "Clothing Retailer J. Jill Group Takes Steps for Possible IPO". The Wall Street Journal. Retrieved May 30, 2020.
  19. ^ Masunaga, Samantha (March 31, 2015). "Women's retailer J.Jill bought by private equity firm". Los Angeles Times. Retrieved May 30, 2020.
  20. ^ Tabuchi, Hiroko (7 April 2016), "Pacific Sunwear Files for Bankruptcy", The New York Times, retrieved 14 May 2021
  21. ^ "Bob Evans to sell restaurants, focus on foods business". ABC News 4. 24 January 2017.
  22. ^ "Golden Gate Capital Announces Eddie Bauer and Pacific Sunwear to Become Portfolio Companies of New Operating Company, PSEB Group". Businesswire. June 7, 2018. Retrieved June 18, 2020.
  23. ^ "Golden Gate Capital Acquires The Learning Experience, a National Franchise and Academy of Early Education". www.businesswire.com. July 2, 2018.
  24. ^ Huff, Pam (November 5, 2018). "San Francisco private equity firm acquires Tampa's Vector Solutions". Tampa Bay Business Journal. Retrieved May 30, 2020.
  25. ^ FinSMEs (2019-09-26). "Golden Gate Capital Acquires Invo Holdings". FinSMEs. Retrieved 2020-03-31.
  26. ^ "Golden Gate Capital Acquires Invo Holdings". www.bloomberg.com. Retrieved 2020-03-31.
  27. ^ "Golden Gate Capital completes sale of water pipeline company Hillstone Environmental". Fluid Handling. Woodcote Media Limited. November 5, 2019. Archived from the original on 2023-06-28. Retrieved May 31, 2020.
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