| Madison Dearborn Partners, LLC | |
| Type: | Privately held company |
| Location: | Chicago, Illinois, United States |
| Industry: | Private equity |
| Products: | Leveraged buyout |
| Assets: | $23 billion[1] |
| Homepage: | http://www.mdcp.com/ |
| Num Employees: | 50+ (2007) |
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]
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]
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]
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]
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 |