- HM Capital Partners
company_name = HM Capital
foundation = 1984
key_people = John Muse, Co-founder
homepage = [http://www.hmcapital.com www.hmcapital.com]
HM Capital Partners is a
private equityfirm in the United States that specializes in leveraged buyouts. The firm, previously known as Hicks, Muse, Tate & Furst, was one of the largest financial sponsors of the 1990s. The firm was founded in 1989 by Tom Hicksand John Muse as Hicks, Muse & Co. and was changed in 1994 to reflect the roles of Charles Tate and Jack Furst.
Hicks & Haas
The son of a
Texas radio stationowner, Tom Hicksbecame interested in leveraged buyouts as a member of First National Bank's venture capitalgroup. Hicks and Robert Haas formed "Hicks & Haas" in 1984; the next year that firm bought "Hicks Communications", a radio outfit run by Hicks' brother Steven. (This would be the first of many media companies bought or created by the buyout firm, often with Steven Hicks' involvement.)
Hicks & Haas' biggest coup was its mid-1980s acquisition of several
soft drinkmakers, including Dr Pepperand 7 Up. The firm took Dr Pepper/7 Up public just 18 months after merging the two companies. In all, Hicks & Haas turned $88 million of investor funding into $1.3 billion. The pair split up in 1989; Hicks wanted to raise a large pool to invest, but Haas preferred to work deal by deal. Robert Haas went on to form [http://www.haaswheat.com Haas Wheat & Partners] a middle market private equity firmbased in Dallas.
Hicks, Muse, Tate & Furst (HMTF)
Hicks raised $250 million in 1989 and teamed with former
PrudentialSecurities banker John Muse to form Hicks Muse. Early investments included Life Partners Group ( life insurance, 1990; sold 1996). In 1991 Morgan Stanley's Charles Tate and First Boston's Jack Furst became partners.
As part of its buy-and-build strategy, Hicks Muse bought
DuPont's connector systems unit in 1993, renamed it Berg Electronics, added six more companies to it, and doubled its earnings before selling it in 1998. Not every acquisition was successful for Hicks Muse. Less-than-successful purchases included bankrupt brewer G. Heileman Brewing Companyof La Crosse, Wisconsin, bought in 1994 and sold two years later for an almost $100 million loss.
The buyout firm's Chancellor Media radio company went public in 1996. That year Hicks Muse gained entry into
Latin Americawith its purchases of cash-starved Mexican companies, including Seguros Commercial America, one of the country's largest insurers. That year also brought International Home Foods (Jiffy Pop, Chef Boyardee) into the Hicks Muse fold.
In 1997 Chancellor and Evergreen Media merged to form Chancellor Media (renamed AMFM in 1999). The next year Hicks Muse continued buying US and Latin American media companies, as well as a few oddities (a UK software maker, a Danish seed company, and US direct-seller Home Interiors & Gifts] ). Hicks Muse and
Kohlberg Kravis Robertsmerged their cinema operations to form the US's largest theater chain, Regal Cinemas. Regal would file for bankruptcy protection in 2001. The company that year also moved into the depressed energy field (Triton Energy) and formed a $1.5 billion European fund.
Acquisitions in 1999 included UK food group Hillsdown Holdings, one-third of Mexican
flourmaker Grupo Minsa, and (just in time for millennial celebrations) popular champagne brands Mummand Perrier-Jouët (it quadrupled its investment when it sold the champagne houses in late 2000). Lured by low stock prices on real estate investment trusts (REITs), the company agreed to buy Walden (formerly Walden Residential Properties) that year.
Hicks Muse, along with UK-based
Apax Partners, bought British Telecom's yellow page directory business Yell Groupfor roughly $3.5 billion, making it the largest non-corporate LBOin European history. Yell subsequently acquired US directories publisher McLeodUSA for about $600 million, and floated in 2003.
Hicks Muse acquired
Nestlé's Ambient Food Business in 2002, which added well-known UK brands Crosse & Blackwell, Branston Pickle, Chivers( marmalade), Sun-Pat( peanut butter), Gale's( honey), Sarson's( vinegar) and Rowntree's(jelly) to the Premier Foodsstable. Cerealmaker Weetabix Limitedand Unilever's cast-offs Ambrosia(creamed rice and puddings) and Brown & Polson, rounded out Premier Foods' portfolio in 2003.
Acquisitions in 2004 included Kerns Oil & Gas (renamed Blackbrush Energy --
natural gasproduction), Persona (Canadian cable televisioncompany), Regency Gas Services (gas processing and distribution), and Centennial Puerto Rico Cable TV (Puerto Rican cable television company). It also agreed to buy a majority stake in trendy luxury shoemaker Jimmy Choo[ [http://www.thedeal.com/servlet/ContentServer?pagename=TheDeal/TDDArticle/TDStandardArticle&bn=NULL&c=TDDArticle&cid=1099927584557 Hicks Muse dons Jimmy Choos] (The Deal, 2004)] . Disposals during the year included the company's remaining stake in Yell and its stake in Premier Foods.
HM Capital and Successors
Hicks Muse struggled in the years immediately following the bursting of the internet and telecom bubbles was often cited with
Forstmann Littleas the highest profile private equity casualties, having invested heavily in technology and telecommunicationscompanies. [ [http://query.nytimes.com/gst/fullpage.html?res=9F00E5D61E31F933A05751C1A9679C8B63&sec=&spon=&pagewanted=4 Even the Smartest Money Can Slip Up] (New York Times, 2001)] The firm's reputation and market position were both damaged by the loss of over $1 billion from minority investments in six telecommunications and 13 Internet companies at the peak of the 1990s stock market bubble as well as several traditional buyouts that ended in bankruptcy (e.g., Regal Cinemas, Viasystems Group, International Wire. [ [http://query.nytimes.com/gst/fullpage.html?res=9402EFDE1739F935A15752C0A9659C8B63 Will He Star Again In a Buyout Revival] (New York Times, 2003)] [ [http://www.forbes.com/2001/04/23/0423faceshicks.html Forbes Faces: Thomas O. Hicks] (Forbes, 2001)] [ [http://www.businessweek.com/bwdaily/dnflash/nov2002/nf20021113_4262.htm An LBO Giant Goes "Back to Basics"] (BusinessWeek, 2002)] Tom Hicksresigned from Hicks Muse at the end of 2004 and was replaced at the helm by co-founder John Muse. Hicks would go on to found of Hicks Holdings LLC. Charles Tate resigned from Hicks Muse in 2002. [ [http://www.businessweek.com/bwdaily/dnflash/mar2002/nf2002037_8903.htm Parting Thoughts from an LBO Hotshot] (BusinessWeek, 2002)]
In January 2005, the company's European arm, separated from Hicks Muse to form
Lion Capital LLP, which has since raised over $4 billion across two private equity funds.
In March 2006, Hicks Muse Tate & Furst changed its name to HM Capital reflecting the departure of
Tom Hicksand the new group of partners heading the firm. [ [http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-hicksmuse_02bus.ART.State.Edition2.1885d841.html A different name for Hicks Muse] (Dallas Morning News, 2006)] HM Capital appears to be overcoming initial obstacles, raising new capital from institutional investorsfor a $1 billion private equity fund, its first in more than five years. [ [http://blogs.wsj.com/deals/2007/03/01/remember-hicks-muse-theyre-back-sort-of/ Deal Journal Remember Hicks Muse? They're Back (Sort of)] (WSJ.com, 2007)]
* [http://www.hmcapital.com HM Capital official website]
* [http://www.bizjournals.com/dallas/stories/2007/12/17/daily32.html HM Capital buys water bottler] (Dallas Business Journal, 2007)
* [http://www.hicksholdings.com Hicks Holdings Official Website]
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