What is the truth about Bain Capital?

Fishstyx · Sep 3, 2012

avusbluem5 said:
That "growth" came from acquisitions. Bain borrowed around $300 million to acquire the companies that brought in the $200 million in "new" revenues. There was actually zero real growth. In addition to the new debt, Bain took out $100 million in cash. The company eventually drowned in the new debt and wiped out the investors, including Bain, in bankruptcy. But Bain had only invested $5 million of their own money, and had already extracted over $100 million, not a bad deal.... For Bain. But if you were one of the lenders, or one of the suckers that bought into the IPO, you lost almost everything. If you tried to do this on your own, you would be in jail for fraud....

Umm, those were net sales, not borrowing. You understand the differences between sales and borrowing...right?

The Company is one of the largest manufacturers and marketers of paper-based
office products (excluding computer forms and copy paper) in the $60 billion to
$70 billion North American office products industry. The Company offers a broad
product line including nationally branded and private label writing pads, file
folders, envelopes and other office products. Through its Ampad division, the
Company is among the largest and most important suppliers of pads and other
paper-based writing products, filing supplies and envelopes to many of the
largest and fastest growing office products distributors. Acquired in October
1995, the Company's Williamhouse division is the leading supplier of mill
branded, specialty and commodity envelopes to paper merchants/distributors. The
Company's strategy is to grow by focusing on the largest and fastest growing
office product distribution channels, making acquisitions, introducing new
product lines, broadening product distribution across its channels and
maintaining its position among the lowest-cost manufacturers in the industry.
As a result of this strategy, the Company's sales have grown at a compound
annual rate of approximately 34% from 1992 to 1995. For the year ended December
31, 1995, the Company had net sales of $617.2 million and income from
operations of $57.3 million on the pro forma basis described herein. See
"Unaudited Pro Forma Financial Data."

http://sec.gov/Archives/edgar/data/5588/0000950130-96-002127.txt

The debt accumulated up to the point of bankruptcy was done via borrowing for acquisitions, buying other companies and growing. Which caused their sales to increase but also their debt. Ironically, at the time of their bankruptcy, they claimed the big box office supply stores is what started to reduce their sales. Mainly, Staples.

Fishstyx · Sep 3, 2012

avusbluem5 said:
Lie #1: Bain did not "move on" they still held 30% of the Ampad when it filed for bankruptcy.
Lie#2: "Growth", there was none, it was acquisitions, financed with debt that gave appearance of growth.
lie #3: "Bain had nothing to do with bankruptcy", Bain had everything to do with Ampad bankruptcy, and was firmly in control when Ampad went bust.

1. They did move on as far as management, they remained a stockholder. So not a lie
2. They grew their sales by acquisitions as well as their debt. So not a lie.
3. Now thats a lie. Bain was the majority stock holder and provided managerial advisory services. They relinquished full control when the company went public.

avusbluem5 · Sep 3, 2012

Fishstyx said:
Umm, those were net sales, not borrowing. You understand the differences between sales and borrowing...right?

http://sec.gov/Archives/edgar/data/5588/0000950130-96-002127.txt

Do you understand what "unaudited pro forma financial statements" mean? Even so, most of What you posted backs up my post. Thanks

Travis007 · Sep 3, 2012

AdamT said:
The truth is that his inate sense of ethics and morality would disqualify him from working at Bain. You can't work there if you have a conscience.

I now Obama being a race baiting, race hustler is the moral high ground..

avusbluem5 · Sep 3, 2012

Fishstyx said:
1. They did move on as far as management, they remained a stockholder. So not a lie
2. They grew their sales by acquisitions as well as their debt. So not a lie.
3. Now thats a lie. Bain was the majority stock holder and provided managerial advisory services. They relinquished full control when the company went public.

More lies... They never managed Ampad, they hired a management team. Bain was not qualified to run a paper products manufacturer, and they knew it. They charged fees for arranging loans, the IPO, and finance related consulting. Romney freely admitted he never managed any of their investment companies.

Acquisitions are not "growth", they are Acquisitions. Growth is making/selling more.

Stockholders never relinquish control, and as major stock holder, they hand picked the management team. You don't seem to understand how corporations work. I imagine the team Romney hired before the IPO, remained until bankruptcy.

Fishstyx · Sep 3, 2012

avusbluem5 said:
More lies... They never managed Ampad, they hired a management team. Bain was not qualified to run a paper products manufacturer, and they knew it. They charged fees for arranging loans, the IPO, and finance related consulting. Romney freely admitted he never managed any of their investment companies.

Acquisitions are not "growth", they are Acquisitions. Growth is making/selling more.

Stockholders never relinquish control, and as major stock holder, they hand picked the management team. You don't seem to understand how corporations work. I imagine the team Romney hired before the IPO, remained until bankruptcy.

Acquisition is growth when you either use it to increase your market share by acquiring the competition or use what you acquire to expand, generating an increase sales. Their net sales increased.

jimbo · Sep 3, 2012

MaggieD said:
Here's the truth I found. What demonizing truths are out there? There are certainly none here:

Romney and his partners raised $37 million over a one-year period to start the firm...a venture capital company founded in 1984. By 1985, Romney considered closing the company, as they were having a hard time finding companies to invest in. As an example, their first major deal was to bankroll Staples in 1986. It has grown from zero stores to 2000 stores by 2008, returning their initial $4.5 million investment sevenfold. There are quite a few other successful venture capital investments that Bain elected to make -- returning an average 50% annualized return to the company. People get really rich that way. IOW, these guys could pick 'em.

In 1989, Bain broadened its strategy from venture capital provider to include leveraged buyouts and growth capital investments. By the end of 1990, Bain had financed 35 companies with combined revenues of $3.5 billion. Their success rate in picking the right companies was about 50/50. Losing their capital in 50% of their deals. Hitting it big in the other 50%.

Bain Capital - Wikipedia, the free encyclopedia

What did this company do that so evil?

Maggie, you are absolutely right. I have the privilege of knowing an extremely successful venture capitalist. They hit it big, very big, with an investment of $10,000 that turned into a company that they sold for billions. Along the way, several other start ups were funded. Some failed, a few succeeded. The money they invested in one construction company was totally lost in the housing burst. Another that I know of they sat on the investment continually funding for 20 years, sold out just recently Invested a quarter million in a venture that never got off the ground. There is no guarantees in the VC business.

Incidentally, along the way, they have significantly funded several charities, and in large amounts.

Anyone can invest in VC companies if they so choose. Or start one of their own. Ot you can conceive an idea and convince a VC company that it is worth the investment. Or I guess you can just sit around and whine that the other guy is better off than you. That is often the difference between being in the 99% or the 1%.

MaggieD · Sep 3, 2012

avusbluem5 said:
That story is absolutely in the link. You did not read the 5 page (long pages) in the 1 minute it took you to respond initially.

Oh ****. My apologies. You may possibly not think I was stupid, but I most certainly do. Mea culpa. I'll read up tonight or tomorrow and respond to Adam.

@ Adam -- see above.

Travis007 · Sep 3, 2012

jimbo said:
Maggie, you are absolutely right. I have the privilege of knowing an extremely successful venture capitalist. They hit it big, very big, with an investment of $10,000 that turned into a company that they sold for billions. Along the way, several other start ups were funded. Some failed, a few succeeded. The money they invested in one construction company was totally lost in the housing burst. Another that I know of they sat on the investment continually funding for 20 years, sold out just recently Invested a quarter million in a venture that never got off the ground. There is no guarantees in the VC business.

Incidentally, along the way, they have significantly funded several charities, and in large amounts.

Anyone can invest in VC companies if they so choose. Or start one of their own. Ot you can conceive an idea and convince a VC company that it is worth the investment. Or I guess you can just sit around and whine that the other guy is better off than you. That is often the difference between being in the 99% or the 1%.

great post ... bullseye

Objective Voice · Sep 3, 2012

Here's a part from the OP article that can be read straight from page 1:

What most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.

By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place.

That's a rather heavy condemnation if ever there was one! :shock:

Hairytic · Sep 3, 2012

MaggieD said:
Here's the truth I found. What demonizing truths are out there? There are certainly none here:

Romney and his partners raised $37 million over a one-year period to start the firm...a venture capital company founded in 1984. By 1985, Romney considered closing the company, as they were having a hard time finding companies to invest in. As an example, their first major deal was to bankroll Staples in 1986. It has grown from zero stores to 2000 stores by 2008, returning their initial $4.5 million investment sevenfold. There are quite a few other successful venture capital investments that Bain elected to make -- returning an average 50% annualized return to the company. People get really rich that way. IOW, these guys could pick 'em.

In 1989, Bain broadened its strategy from venture capital provider to include leveraged buyouts and growth capital investments. By the end of 1990, Bain had financed 35 companies with combined revenues of $3.5 billion. Their success rate in picking the right companies was about 50/50. Losing their capital in 50% of their deals. Hitting it big in the other 50%.

Bain Capital - Wikipedia, the free encyclopedia

What did this company do that so evil?

Newt gengrich and Rick Perry had a lot to say about the evils of Romney's business dealings. Rick refered to it as vulture capitalism.

avusbluem5 · Sep 3, 2012

Fishstyx said:
Acquisition is growth when you either use it to increase your market share by acquiring the competition or use what you acquire to expand, generating an increase sales. Their net sales increased.

You do not seem to understand what "net sales" means. Net sales is gross sales, less returns, allowance for damaged goods and discounts.

If you have company with $8 million "net" sales, buy a company with $200 million net sales, the resulting new company has $208million in "net" sales, which seems impressive, but that is zero growth.

jimbo · Sep 3, 2012

Hairytic said:
Newt gengrich and Rick Perry had a lot to say about the evils of Romney's business dealings. Rick refered to it as vulture capitalism.

Would that have been when they were all submitting resumes for the same job?

Hairytic · Sep 3, 2012

jimbo said:
Would that have been when they were all submitting resumes for the same job?

Yes it would be. What? They didn't tell the truth then? Do they like Romney now? Where is the truth?

What is the truth about Bain Capital?

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