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Madison Dearborn Partners

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Madison Dearborn Partners, LLC
Company typePrivately held company
IndustryPrivate equity
Founded1992; 32 years ago (1992)
HeadquartersChicago, Illinois, United States
ProductsLeveraged buyout
Total assets$23 billion[1]
Number of employees
50+ (2007)
Websitehttp://www.mdcp.com/

Madison Dearborn Partners (MDP) is an American private equity firm specializing in leveraged buyouts of privately held or publicly traded companies, or divisions of larger companies; recapitalizations of family-owned or closely held companies; balance sheet restructurings; acquisition financings; and growth capital investments in mature companies. MDP operates using an industry-focused investment approach and focuses on the following sectors: basic industries, business and government software and services, financial & transaction services, health care, and TMT services.[2] Since the founders established MDP as an independent firm in 1992, the firm has raised seven funds with aggregate capital of approximately $23 billion, and has completed investments in more than 130 companies.[3]

History

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Madison Dearborn Partners was founded in 1992 and is based in Chicago, Illinois. The founders, John A Canning Jr, Paul J. Finnegan, Samuel M. Mencoff, and Nicholas W. Alexos, had previously made private equity investments for First Chicago Bank.[4] The north-east corner of First Chicago's then-headquarters was at the intersection of Madison and Dearborn Streets.

Madison Dearborn's chairman, John Canning, Jr., is also a minority owner of the Milwaukee Brewers baseball team and submitted an ultimately unsuccessful bid to buy the Chicago Cubs[5][6]

Investments

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History of private equity
and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)
The 2010s
(expansion)
The 2020s
(COVID-19 recession)

In 1998, the firm bought Reiman Publications, based in Greendale, Wisconsin, from Roy Reiman for $640 million. In 2002, the firm sold Reiman Publications to Reader's Digest Association.[7]

Between 2006 and 2007, Madison Dearborn completed leveraged buyout transactions for a number of publicly traded companies, including Asurion,[8] CDW,[9] LA Fitness,[10] Nuveen investments,[11] Sorenson Communications,[12] Univision Communications,[13] VWR International[14] and Yankee Candle.[15]

In 2007, the firm joined with Michael Eisner's Tornante investment company to buy out baseball card maker The Topps Company.[16]

In 2014, a plan for MDP to sell Nuveen to TIAA-CREF for $6.25 billion was announced.[17] While the Wall Street Journal cited an anonymous source close to the transaction to the effect that MDP "will have broken even on the transaction", Felix Salmon queried that assertion at Reuters.[18] Dan Primack at Fortune then published additional information about auxiliary benefits to MDP to buttress the break-even claim.[19]

Bell Canada

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In June 2007, Madison Dearborn, Providence Equity Partners and the Ontario Teachers' Pension Plan agreed to acquire Bell Canada Enterprises (BCE) in what would have been one of the largest leveraged buyouts in history. The transaction was valued at C$51.7billion (US$48.5 billion) and was approved on September 21, 2007 by more than 97% shareholder votes cast by holders of common and preferred shares.[20][21]

Bondholders argued in the Superior Court of Quebec that the deal did not protect their interests.[22] While the court rejected the bondholder's arguments, the Quebec Court of Appeal sided with those opposed to the deal. In 2008, the Supreme Court of Canada overruled the Court of Appeal, allowing the deal to move forward.[23]

In December 2008, the deal collapsed after auditing firm KPMG determined that the transaction would create an insolvent entity.[24]

Investment funds

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MDP invests through a series of private limited partnerships and its investors include a variety of pension funds, endowments and other institutional investors:

Fund Vintage
Year 		Committed
Capital
Madison Dearborn Capital Partners 1993 $550 million
Fund II 1997 $925 million
Fund III 1999 $2.2 billion
Fund IV 2000 $4.1 billion
Fund V 2006 $6.5 billion
Fund VI 2010 $4.1 billion
Fund VII 2016 $4.4 billion
Fund VIII 2021 $5.0 billion

Sources:[25][26]

Selected portfolio

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References

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  1. ^ Capital raised since inception in 1992
  2. ^ "Madison Dearborn | Sectors". Madison Dearborn Partners. Retrieved May 18, 2018.
  3. ^ "Madison Dearborn | About Overview". Madison Dearborn Partners. Retrieved May 21, 2018.
  4. ^ "Company News; Fund Venture Begun in Chicago". The New York Times. January 7, 1992. ISSN 0362-4331. Retrieved July 23, 2022.
  5. ^ Is John Canning Jr. the next John Henry? Archived 2009-09-03 at the Wayback Machine (TheDeal.com, 2007)
  6. ^ Brewers stakeholder in the fan business[permanent dead link‍] (Milwaukee Journal Sentinel)
  7. ^ "One Toke Over The Line: University of Denver's Korbel School of International Studies To Grant George W. Bush an International Service Award: Part Four of an Open Series". View from the Left Bank: Rob Prince's Blog. July 22, 2013. Retrieved August 25, 2023.
  8. ^ Beltran, Luisa (August 2, 2015). "Which PE firm (or firms) is selling some of its Asurion stake?". PE Hub. Retrieved April 4, 2024.
  9. ^ Mouawad, Jad (May 30, 2007). "Equity Firm to Acquire Net Retailer". The New York Times. ISSN 0362-4331. Retrieved July 23, 2022.
  10. ^ "Madison Dearborn Buys into LA Fitness". Venture Capital Journal. May 21, 2007. Retrieved April 4, 2024.
  11. ^ "Mutual Fund Manager Agrees to Buyout". The New York Times. Reuters. June 21, 2007. ISSN 0362-4331. Retrieved July 23, 2022.
  12. ^ Marek, Lynne (July 26, 2014). "A deal that went sideways". Crain's Chicago Business. Retrieved April 4, 2024.
  13. ^ Madison Dearborn part of winning $12.3B bid for Univision (Chicago Business News, Analysis & Articles, 2006)
  14. ^ "Madison Dearborn to buy VWR International". Reuters. August 9, 2007. Retrieved April 4, 2024.
  15. ^ "Candle Maker Accepts a Buyout Offer". The New York Times. October 26, 2006. ISSN 0362-4331. Retrieved July 23, 2022.
  16. ^ "A Bid for Topps, the Baseball Card Company". The New York Times. Reuters. May 25, 2007. ISSN 0362-4331. Retrieved July 23, 2022.
  17. ^ Hoffman, Liz; Scism, Leslie (April 14, 2014). "TIAA-CREF to buy Nuveen Investments for $6.25 billion". MarketWatch. Retrieved July 23, 2022.
  18. ^ Salmon, Felix (April 14, 2014). "Private equity math, Nuveen edition". Reuters. Retrieved July 23, 2022.
  19. ^ Primack, Dan (April 14, 2014). "Madison Dearborn's patience pays off on Nuveen Investments". Fortune. Retrieved July 23, 2022.
  20. ^ Privatization of BCE
  21. ^ "BCE sets $33 billion buyout deal, one of Canada's biggest - Jun. 30, 2007". money.cnn.com. June 30, 2007. Retrieved April 4, 2024.
  22. ^ McFeat, Tom (May 22, 2008). "The BCE takeover". CBC. Retrieved April 4, 2024.
  23. ^ "BCE Finalizes Tumultuous Takeover". Forbes. July 4, 2008. Retrieved April 4, 2024.
  24. ^ Lattman, Peter (December 11, 2008). "BCE Leveraged Buyout Deal Collapses - WSJ". WSJ. Retrieved April 4, 2024.
  25. ^ Skelly, Keenan (May 4, 2010). "Press Release". The Wall Street Journal.
  26. ^ Madison Dearborn Partners Overview Archived 2002-06-04 at archive.today
  27. ^ Dusane, Ameya (May 16, 2019). "Madison Dearborn Partners Invests in InMoment's Customer Experience Management Platform". Martech Advisor. Retrieved March 8, 2021.
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