 | |
| Formerly |
|
|---|---|
| Company type | Limited liability company |
| Industry | Private equity |
| Founded | 1984 |
| Founders | |
| Defunct | 2013 |
| Fate | Dissolved |
| Headquarters | , |
| Products | Leveraged buyouts,Growth capital |
| Website | hmcapital.com |
HM Capital Partners was aprivate equity firm in the United States that specialized inleveraged buyouts. The firm was previously known asHicks, Muse, Tate & Furst. It was founded in 1989 byTom Hicks andJohn Muse as Hicks, Muse & Co. and was changed in 1994 to reflect the roles of Charles Tate and Jack Furst.
The son of aTexasradio station owner,Tom Hicks became interested inleveraged buyouts as a member of First National Bank'sventure capital group.Hicks andRobert Haas formedHicks & Haas in 1984; the next year that firm boughtHicks Communications, a radio outfit run by Hicks' brotherSteven. (This would be the first of several media companies bought or created by the buyout firm that involved Steven Hicks.)
Hicks & Haas' biggest coup was its mid-1980s acquisition of severalsoft drink makers, includingDr Pepper and7 Up. The firm took Dr Pepper/7 Up public just 18 months after merging the two companies. In all, Hicks & Haas turned an $88 million investment 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.[1] Robert Haas went on to form Haas Wheat & Partners a middle marketprivate equity firm based in Dallas.[2]
Hicks raised $250 million in 1989 and teamed with formerPrudential Securities banker John Muse to form Hicks Muse. Early investments included Life Partners Group (life insurance, 1990; sold 1996). In 1991Morgan Stanley's Charles Tate andFirst Boston's Jack Furst became partners.
As part of its buy-and-build strategy, Hicks Muse boughtDuPont'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 brewerG. Heileman Brewing Company ofLa 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 intoLatin America with its purchases of cash-starved Mexican companies, including Seguros Commercial America, one of the country's largest insurers. That year it 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 (aUK software maker, a Danish seed company, and US direct-sellerHome Interiors and Gifts). Hicks Muse andKohlberg Kravis Roberts merged theircinema operations to form the US's largesttheater chain,Regal Cinemas. Regal filed for bankruptcy protection in 2001. The company that year also moved into the depressed energy field (Triton Energy) and formed a $1.5 billionEuropean fund. They also invested $400 million into Teligent, Inc., a fixed wireless telecommunications carrier. Teligent filed for bankruptcy in 2001 and is now defunct.
Acquisitions in 1999 included UK food group Hillsdown Holdings, one-third of Mexicanflour maker Grupo Minsa, and (just in time for millennial celebrations) popularchampagne brandsMumm and Perrier-Jouët (it quadrupled its investment when it sold the champagne houses in late 2000). Lured by low stock prices onreal estate investment trusts (REITs), the company agreed to buy Walden (formerly Walden Residential Properties) that year.
Hicks Muse, along with UK-basedApax Partners, boughtBritish Telecom's yellow page directory businessYell Group for roughly $3.5 billion, making it the largest non-corporateLBO in European history.Yell subsequently acquired US directories publisher McLeodUSA for about $600 million, and floated in 2003.
Hicks Muse acquiredNestlé's Ambient Food Business in 2002, which added well-known UK brandsCrosse & Blackwell,Branston Pickle,Chivers (marmalade),Sun-Pat (peanut butter),Gale's (honey),Sarson's (vinegar) andRowntree's (jelly) to thePremier Foods stable.Cereal makerWeetabix Limited andUnilever's cast-offsAmbrosia (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 gas production),Persona (Canadiancable television company), 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 luxuryshoemakerJimmy Choo.[3] Disposals during the year included the company's remaining stake inYell and its stake in Premier Foods.
In May 2005,Sturm Foods was acquired by HM Capital Partners. Located in Manawa, Wisconsin, Sturm Foods specializes in the manufacturing of bulk goods such as oatmeal and markets several sugar-free products under private labels.
Hicks Muse struggled in the years immediately following the bursting of theinternet and telecom bubbles was often cited withForstmann Little as the highest profileprivate equity casualties, having invested heavily in technology andtelecommunications companies.[4] 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.[5][6][7]
Tom Hicks resigned 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 Hicks Holdings LLC. Charles Tate resigned from Hicks Muse in 2002.[8]
In January 2005, the company's European arm, separated from Hicks Muse to formLion Capital LLP, which has since raised over $4 billion across twoprivate equity funds.
In March 2006, Hicks Muse Tate & Furst changed its name to HM Capital reflecting the departure ofTom Hicks and the new group of partners heading the firm.[9] HM Capital appears to be overcoming initial obstacles, raising new capital frominstitutional investors for a $1 billionprivate equity fund, its first in more than five years.[10]
In 2013, HM Capital began dissolving. The energy group spun out as Tailwater Capital and the food group spun off as Kainos Capital.[11][12]