Forstmann Little & Company

Template:Short description {{#invoke:Infobox|infobox}}Template:Template otherTemplate:Main other{{#invoke:Check for clobbered parameters|check|nested=1|template=Infobox company|cat=Template:Main other|name; company_name|logo; company_logo|logo_alt; alt|trade_name; trading_name|former_names; former_name|type; company_type|predecessors; predecessor|successors; successor|foundation; founded|founders; founder|defunct; dissolved|hq_location; location|hq_location_city; location_city|hq_location_country; location_country|num_locations; locations|areas_served; area_served|net_income; profit|net_income_year; profit_year|owners; owner |homepage; website }}{{#invoke:Check for unknown parameters|check|unknown=Template:Main other|preview=Page using Template:Infobox company with unknown parameter "_VALUE_" | ignoreblank=y | alt | area_served | areas_served | assets | assets_year | aum | brands | company_logo | company_name | company_type | defunct | dissolved | divisions | embed | equity | equity_year | fate | footnotes | former_name | former_names | foundation | founded | founder | founders | genre | homepage | hq_location | hq_location_city | hq_location_country | incorporated | image | image_alt | image_caption | image_size | image_upright | income_year | industry | ISIN | key_people | location | location_city | location_country | locations | logo | logo_alt | logo_caption | logo_class | logo_size | logo_upright | members | members_year | module | name | native_name | native_name_lang | net_income | net_income_year | num_employees | num_employees_year | num_locations | num_locations_year | operating_income | owner | owners | parent | predecessor | predecessors | production | production_year | products | profit | profit_year | rating | ratio | revenue | revenue_year | romanized_name | services | subsid | successor | successors | traded_as | trade_name | trading_name | type | website| qid | fetchwikidata | suppressfields | noicon | nocat | demo | categories }} Forstmann, Little & Company was an American private equity firm, specializing in leveraged buyouts (LBOs). At its peak in the late 1990s, Forstmann Little was among the largest private equity firms globally. Ultimately, the firm would suffer from the bursting of the internet and telecom bubbles, having invested heavily in technology and telecommunications companies.<ref name="bloom"/> Following the death of the last surviving founder, Theodore Forstmann, in 2011, the firm was dissolved and its assets sold off. It closed in May 2014.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

History

Ted Forstmann was a golfing partner of Derald Ruttenberg at the Deepdale Country Club on Long Island. He arranged for Ruttenberg to meet Henry Kravis and Jerry Kohlberg of the start-up Kohlberg Kravis Roberts. Kravis and Kohlberg proposed what they called a leveraged buyout. After the two had left, Ruttenberg suggested that Forstmann could do the same himself. Ruttenberg arranged funding for Forstmann, who launched Forstmann Little & Company in 1978.<ref>Template:Cite book</ref> The company was founded by brothers Ted and Nick Forstmann, and Brian Little.<ref>Template:Cite news</ref> With the deaths of Brian Little and Nicholas Forstmann in 2000 and 2001,<ref>Template:Cite news</ref> respectively, Ted Forstmann was the chief partner. A third brother, J. Anthony Forstmann, is a limited partner in the firm.

Between its inception in 1978 to its 2014 closing, the firm made more than 30 acquisitions and significant investments returning over $14 billion in profit for its investors.

Successful acquisitions included Gulfstream Aerospace, Topps Playing Cards, Dr Pepper, Stanadyne, and General Instrument.<ref name=":0" /> The company was usually successful in making a profit on such purchases, selling Gulfstream to General Dynamics, and General Instrument to Motorola. In the case of Gulfstream, Ted Forstmann took direct control of the financially ailing company's day-to-day operations to improve the company's attractiveness to a potential acquirer.<ref name=":1" />

The company has also had some flops, such as McLeodUSA and XO Communications. In 2002, the state of Connecticut sued Forstmann, Little & Company to recover $125 million in losses associated with investments in these two telecom companies, citing negligence and breach of contract.<ref>Litigation: A growing risk factor for private equity, Private Equity Newsletter, September 18, 2007.</ref> While Forstmann settled the case for $15 million, the suit was considered a landmark, launching a series of similar actions between private equity fund managers and public entity investors.<ref>Goodbye to all that, New York Times, October 10, 2004.</ref>

One prominent episode in the life of the company was the 1988 bidding war for RJR Nabisco. Forstmann Little offered to acquire RJR Nabisco, but the management (chiefly F. Ross Johnson) instead chose Shearson Lehman Hutton. In the end, the board of directors chose Forstmann Little's arch-rival, Kohlberg Kravis Roberts & Co. The episode was popularized in the book Barbarians at the Gate: The Fall of RJR Nabisco.

Other headline transactions the firm participated in include Revlon (1985), which resulted in the so-called Revlon Duty, and Citadel Broadcasting, of which Forstmann Little owns 27%, following a merger with ABC Radio in 2006. In 2004, Forstmann Little acquired IMG in a $750 million deal,<ref>Template:Cite news</ref> and in 2005 bought 24 Hour Fitness for $1.6 billion.<ref>Template:Cite news</ref>

Dissolution

In 2011, Theodore Forstmann, the last surviving founder, died of brain cancer.<ref name=":1">Template:Cite news</ref> The law firm Akin Gump Strauss Hauer & Feld dissolved the firm by selling off its assets.<ref name=":0">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> IMG was sold in 2013 for $2.3 billion to William Morris Endeavor.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The last asset to be sold was 24 Hour Fitness, which was purchased for $2 billion by AEA Investors.<ref name=":0" /><ref>Template:Cite news</ref>

External links

• Forstmann Little & Company (Archive of Company Website from May 2000)