The Biggest Private Equity Buyouts in History

The relatively short history of private equity corporate buyouts is both extremely volatile and extremely profitable.

We’ve looked at the most highly valued private equity deals of all-time, adjusted them for inflation and compiled a list of the Top 15.

Over the quarter century-long surge in the occurrences and value of leveraged buyouts, the biggest bangs have occurred right at the end of that boom.

Of the entire list only one of the deals occurred before 2005 and 13 occurred in either 2006 and 2007. The largest buyout deal since 2007, Blackstone’s acquisition of Bank United in 2009 for $10 billion, didn’t even come close to making the list.

#15 Hertz

Deal value in 2005: $15 billion

Inflation adjusted value: $16.95 billion

Buyers: Carlyle, Merrill Lynch and Clayton Dubilier & Rice

Just previous to the car rental company's 2006 IPO, Hertz (at the time a property of Ford) was sold to an equity group consisting of three major firms.

The 2005 acquisition was very beneficial to all groups as the Hertz IPO has yielded good returns, especially with the company's surge in price per share after its own acquisition of Dollar/Thrifty in 2011.

#14 Capmark

Deal value in 2005: $16.7 billion

Inflation adjusted value: $18.88 billion

Buyers: KKR

In 2005 Kohlberg, Kravis, Roberts' struck a very expensive buyout deal with Capmark Financial, a vestigial piece of GMACs mortgage banking operation. The timing of taking on mortgage bonds was clearly poor.

In 2009, Capmark filed for bankruptcy, making it clear that it was hardly worth the king's ransom of just four years earlier.

#13 Albertson's

Deal value in 2006: $17.4 billion

Inflation adjusted value: $19.05 billion

Buyers: Cerberus Capital Management

When Cerberus (in conjunction with CVS and SuperValu) acquired Albertson's in 2006, it took the company private and restructured the supermarket chain from within, cutting and/or re-branding stores in order to boost revenue.

#12 Freescale Semiconductor

Deal value in 2006: $17.6 billion

Inflation adjusted value: $19.27 billion

Buyers: Blackstone, Carlyle, Permira and TPG

The 2006 buyout of the former Motorola property by a consortium of investors was the largest buyout of any technology firm in history.

The aftermath of the takeover was almost fatal as the company barely avoided a liquidity crisis after realising the enormity of its debts in 2008. But Freescale's planned IPO in 2011 seems to indicate things are looking up for the semiconductor producer.

#11 Kinder Morgan

Deal value in 2006: $21.6 billion

Inflation adjusted value: $23.65 billion

Buyers: Carlyle, Goldman Sachs and Riverstone

Taking the second-largest oil producer in Texas private in 2006 was a stroke of genius as it has allowed industry icons Carlyle and Goldman to ride out the drop in oil prices in... well, private.

And with Kinder Morgan's impending IPO being made official in February, the equity groups are poised to see a major return on their investments.

#10 Alliance Boots

Deal value in 2007: $24.8 billion

Inflation adjusted value: $26.4 billion

Buyers: KKR

The British pharmacy and healthcare chain is the largest leveraged buyout in the history of European business.

KKR arranged the deal alongside Alliance's former CEO, the Italian tycoon Stefano Pessina, who invested some of his own money in the deal and took control of the company in 2007.

#9 Hilton Hotels

Deal value in 2007: $26 billion

Inflation adjusted value: $27.68 billion

Buyers: Blackstone

Blackstone took control of Conrad Hilton's resort and hotel empire by spending billions and moving fast to take the company private towards the end of 2007.

Hilton's debt turned into a serious problem for Blackstone as the economic downturn spiraled deeper and deeper, but a restructuring of debt in 2010 has made Blackstone's investment in becoming the world's largest hotelier look smarter and smarter.

It is unclear if Blackstone also holds title on Paris and/or Nicky.

#8 ClearChannel

Deal value in 2006: $25.7 billion

Inflation adjusted value: $28.14 billion

Buyers: KKR, Bain Capital and Thomas H. Lee

Buying out ClearChannel communications gave the three firms involved in the deal access to what was a compellingly emergent satellite radio market in 2006.

But despite Howard Stern's best attempts, subscription radio has not caught on with the public during a major recession and XM/Sirius (ClearChannel's most appealing asset at the time of the buyout) has seen its stock price plummet, reaching its nadir in 2009.

#7 Alltel

Deal value in 2007: $27 billion

Inflation adjusted value: $28.74 billion

Buyers: Goldman Sachs and TPG Capital

After picking up Alltel for a rather hefty sum in 2007, Goldman and TPG turned around and sold the wireless company to Verizon for a profit of almost $3 billion, less than a year later.

It was a rare victory in a very tough year for Wall Street.

#6 Harrah's Entertainment

Deal value in 2006: $27.4 billion

Inflation adjusted value: $30 billion

Buyers: Apollo Global Management and TPG

After the gaming conglomerate acquired the Caesar's Entertainment corporation in 2005, shares jumped, but that didn't deter Apollo and TPG from forming Hamlet Holdings and taking Harrah's private in 2008.

Hamlet will change the company's name to Caesars Entertainment when it takes the company back into public trading, which it intends to do soon according to an announcement made late last year.

#5 First Data

Deal value in 2007: $29 billion

Inflation adjusted value: $30.87 billion

Buyers: KKR and TPG

The 2007 KKR-led buyout of internet commerce giant First Data took over the title of the largest technology deal in the history of private equity. A title it still holds.

Since the acquisition, First Data has expanded as a private company, moving its operations into markets abroad, including what was once Europe's emergent technology capital; Ireland.

#4 Hospital Corp. of America

Deal value in 2006: $32.7 billion

Inflation adjusted value: $35.81 billion

Buyers: Bain, KKR and Merrill Lynch

At the time (and without being adjusted for inflation), the 2006 buyout of HCA was the largest private equity deal in history.

And HCA set another record just a few years later when it went public again under Bain and KKR's guidance. The $3.8 billion raised was the largest sum ever for a company under the guidance of a private equity group.

#3 Equity Office Properties

Deal value in 2007: $38.9 billion

Inflation adjusted value: $41.41 billion

Buyers: Blackstone

This deal was a veritable 'Clash of the Titans' between Sam Zell and Steve Schwarzman.

Well, if by 'Clash' one means 'Everybody gets wealthier.'

But the deal isn't without hiccups. Paying almost $39 billion, in 2007 dollars, for the company that controls the largest portfolio of commercial properties in the U.S., was an aggressive move to make during a growing mortgage crisis.

And that risk was reflected in the fact that $16 billion of the money that Blackstone spent was to assume Equity Office's massive debt.

#2 Energy Future Holdings

Deal value in 2007: $44.37 billion

Inflation adjusted value: $47.23 billion

Buyers: KKR, TPG and Goldman Sachs

As if they felt challenged by Blackstone's enormous deal to acquire Equity Office, KKR, Goldman and TPG moved fast to spend $45 billion on the massive Dallas-based electric utility company and then appoint former Secretary of State to run the whole thing.

Energy Future Holdings (TXU) could boast the largest amount ever paid in a private equity deal and looks to be a major win for its new owners should the company make a successful IPO in the near future.

#1 RJR Nabisco

Deal value in 1989: $31.1 billion

Inflation adjusted value: $55.38 billion

Buyers: KKR

Still the biggest, baddest and most iconic private equity buyout of all time, KKR's staggeringly aggressive (and inevitably contentious) move on the tobacco and food titan can be fairly credited with giving rise to the leveraged buyout boom over the next 20-odd years.

So intricate and Shakespearean was the deal making drama that it spawned a best-selling book and a TV movie (both titled 'Barbarians at the Gate') and lives on in Wall Street lore as one of them most game-changing deal in American financial history.

Some of our 15 might make this list in the near future

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