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| Type | Public (NYSE: BX) |
|---|---|
| Founded | 1985 |
| Founder(s) | Peter G. Peterson Stephen A. Schwarzman |
| Headquarters |  New York, NY, USA |
| Area served | Worldwide |
| Key people | Stephen A. Schwarzman (Chairman) & (CEO) Peter G. Peterson (Senior Chairman) |
| Industry | Financial Services |
| Products | Private Equity Investment Banking Investment Management |
| Market cap | US$ 3.74 billion (2008)[1] |
| Revenue | ▲ US$ 3.050 billion (2007) |
| Operating income | ▼ US$ 285 million (2007) |
| Net income | ▼ US$ 1.623 billion (2007) |
| Total assets | ▼ US$ 13.174 billion (2007) |
| Total equity | ▲ US$ 4.226 billion (2007) |
| Employees | 1,020 (2008) |
| Website | www.blackstone.com |
The Blackstone Group, L.P. (NYSE: BX) is a an alternative asset management and financial services company that specializes in private equity, real estate and marketable alternative investment strategies as well as M&A, restructuring and fund placement advisory services.
The firm was founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman who had previously worked together at Lehman Brothers, Kuhn, Loeb Inc.
Blackstone is headquartered at 345 Park Avenue in New York City, with offices in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, San Francisco, London, Hamburg, Paris, Mumbai, Tokyo and Hong Kong.
Derivation of the Blackstone name
Blackstone is a cryptogram derived from the names of the two founders (Schwarzman and Peterson). Schwarz is German for black. Peter, or Petra in Greek, means stone or rock.
History
The Blackstone Group was founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman with $400,000 in seed capital.[2] The two founders had previously worked together at Lehman Brothers, Kuhn, Loeb Inc. At Lehman, Schwarzman served as head of Lehman Brothers' global mergers and acquisitions business,
Blackstone was originally formed as a mergers and acquisitions advisory boutique but quickly expanded into new businesses, most notably, private equity. In 1987, the firm entered the private equity investment business and since that time has grown to become one of the largest managers of private equity funds globally. From 1987 through the time of its IPO filing in 2007, Blackstone invested aproximaately $20 billion of capital in 109 private equity transactions and more than $13 billion in 212 real estate transactions.[3]
In 1987, Blackstone entered into a 50-50 partnership with the founders of Blackrock to help those individuals build an asset management business specializing in fixed income investments.[3]
In 1990, Blackstone launched its fund of hedge funds business.
In 1991, Blackstone launched its real estate investment business.
In 1999, Blackstone launched its mezzanine capital business.
In 2006, Blackstone launched its new equity hedge fund.
During the buyout boom of 2006 and 2007, Blackstone completed some of the largest leveraged buyouts completed. Among Blackstone's most notable transactions during this period include the following:
- Equity Office Properties, 2006 – Blackstone completes the $37.7 billion[4] acquisition of one of the largest owners of commercial office properties in the US. At the time of its announcement, the Equity Office buyout became the largest in history, surpassing the buyout of HCA. It would later be surpassed by the buyouts of TXU and BCE (announced but as of the end of the first quarter of 2008 not yet completed).
- Freescale Semiconductor, 2006
- A consortium led by Blackstone and including the Carlyle Group, Permira and the TPG Capital completed the $17.6 billion takeover of the semiconductor company. At the time of its announcement, Freescale would be the largest leveraged buyout of a technology company ever, surpassing the 2005 buyout of SunGard.[5]
- Travelport, 2006
- Travelport, which owns Worldspan and Galileo as well as approximately 48% of Orbitz Worldwide was acquired from Cendant by Blackstone, Technology Crossover Ventures and One Equity Partners in a deal valued at $4.3 billion. The sale of Travelport followed the spin-offs of Cendant's real estate and hospitality businesses, Realogy Corporation and Wyndham Worldwide Corporation, respectively, in July 2006.[6][7] Later in the year, TPG and Silver Lake would acquire Travelport's chief competitor Sabre Holdings.
- Biomet, 2007
- Blackstone, Kohlberg Kravis Roberts, TPG Capital and Goldman Sachs acquired the medical devices company for $11.6 billion.[8]
Initial public offering
Schwarzman's Blackstone Group completed the first major IPO of a private equity firm in June 2007.[9]
On March 22, 2007, Blackstone filed with the SEC[3] to raise $4 billion in an initial public offering. On June 21, Blackstone swapped a 12.3% stake in its ownership for $4.13 billion in the largest U.S. IPO since 2002. Traded on the New York Stock Exchange under the ticker symbol BX, Blackstone priced at $31 per share on June 22, 2007.[10][11]
One of the world's largest private equity firms,[12] it is part of the migration of companies from public to private hands — a total of some US$370 billion in deals in the United States in 2006.
Less than two weeks after the Blackstone IPO, in July 2007 rival private equity firm, Kohlberg Kravis Roberts, filed with the SEC[13] As of the end of 2008, KKR has still not issued shares to the public
Business segments
Corporate private equity
Blackstone manages or owns holdings in Allied Waste, Graham Packaging, Celanese, Nalco, HealthMarkets, Houghton Mifflin, American Axle, Catalent Pharma Solutions, Prime Hospitality, Legoland, Universal Studios Parks, Encore Medical[14], La Quinta, Luxury Resorts (LXR), Pinnacle Foods, Hilton Hotels Corporation, Apria Healthcare, Travelport, The Weather Channel (United States) and (in 2009) The PortAventura Resort.
Blackstone ventures into hotels include acquiring Prime Hospitality (Wellesley Inns & Suites) and Extended Stay America in 2004, La Quinta Inns & Suites in 2005 and Hilton Hotels Corporation in 2007. Extended Stay Hotels was sold to The Lightstone Group in July 2007 and Wellesley Inns were folded into LaQuinta. [15]
Real estate
Blackstone holds more than 13,000,000 square feet (1,200,000 m2) of real estate in Boston, New York, San Francisco and Washington, DC.
Marketable alternative asset management
Blackstone offers private equity, real estate, and hedge funds, first used only for internal investments, but now open to clients.
- Funds of hedge funds
- Mezzanine funds
- Senior debt vehicles
- Proprietary hedge funds
- Closed-end mutual funds
Financial advisory services
- Corporate and mergers and acquisitions advisory - clients include Microsoft, Procter & Gamble, Verizon, Comcast, Sony and AIG.
- Restructuring and reorganization advisory - clients include General Motors[16] Xerox, Enron, Bally Total Fitness and Global Crossing.
- Fund placement advisory group
References
- ^ "Company Profile for The Blackstone Group LP (BX)". Retrieved on 2008-10-02.
- ^ "Blackstone Group company profile". Retrieved on 2008-06-04.
- ^ a b c The Blackstone Group L.P., FORM S-1, SECURITIES AND EXCHANGE COMMISSION, March 22, 2007
- ^ Source: Thomson Financial
- ^ SORKIN, ANDREW ROSS and FLYNN, LAURIE J. "Blackstone Alliance to Buy Chip Maker for $17.6 Billion." New York Times, September 16, 2006
- ^ Sachdev, Ameet. " Orbitz travels to 4th owner: Blackstone Group to buy from Cendant.", Chicago Tribune, July 1, 2006. Accessed September 15, 2007.
- ^ Fineman, Josh. "Cendant to sell Orbitz to Blackstone for $4.3 Bln", Bloomberg.com, June 30, 2006. Accessed September 15, 2007.
- ^ de la MERCED, MICHAEL J. "Biomet Accepts Sweetened Takeover Offer." New York Times, June 8, 2007.
- ^ Photographed at the World Economic Forum in Davos, Switzerland in January 2008.
- ^ SORKIN, ANDREW ROSS and DE LA MERCED, MICHAEL J. "News Analysis Behind the Veil at Blackstone? Probably Another Veil." New York Times, March 19, 2007.
- ^ Anderson, Jenny. "Blackstone Founders Prepare to Count Their Billions." New York Times, June 12, 2007.
- ^ Blackstone Said to Prepare for I.P.O. - Mergers, Acquisitions, Venture Capital, Hedge Funds - DealBook - New York Times
- ^ KKR & CO. L.P., FORM S-1, SECURITIES AND EXCHANGE COMMISSION, July 3, 2007
- ^ PR NewsWire: Encore Medical Enters Into Agreement With Blackstone Capital Partners To Go Private for $6.55 Per Share
- ^ "Corporate Private Equity". Retrieved on 2008-05-22.
- ^ "GM Hires Blackstone". Retrieved on 2008-12-12.
External links
- The Blackstone Group (company website)
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