Six weeks ago, I probably would have told you that Thomas H. Lee Partners must feel like a collective group of losers. They repeatedly got outbid on public-to-private buyouts – in at least one case by more than $700 million. So much due diligence – so little to show for it.
But I can’t help but thinking that the Scotts and Tony are now kicking back with some silent smiles, over no longer being involved with messes like HD Supply (which some LPs would just like the “winning” bidders to bail on). Sure they’re overpaying for Clear Channel, but managed to avoid a similar price hike on Ceridian. When someone tells them they’re no KKR, they probably take it as a compliment.
What is to be seen is if this relative lack of 2007 deal activity – albeit partially involuntary – will be cause potential limited partners to take another look. The Boston-based firm is still seeking $8.5 billion for its sixth fund, with only around $7.8 billion closed as of last check. It made a costly mistake in plowing ahead with fundraising as Refco imploded around it, and lost other potential buyers (particularly overseas) when asked to explain why firm founder Thomas H. Lee was opening up his own shop in New York (thus a recent re-branding to “THL”).
Maybe what it needs to do is launch a website with an anti-portfolio…