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Category: Business and Industry
Date Submitted: 04/09/2016 12:58 AM
9-205-058
REV: AUGUST 19, 2011
MALCOLM BAKER
JAMES QUINN
Ber
rkshire Partne Bid
e
ers: dding f Cart
for
ter’s
In the spring of 2001, Bost
o
ton-based pri
ivate equity firm Berkshi Partners w consider
ire
was
ring a
levera
aged buyout (LBO) of the William Cart Co., a lead
ter
ding producer of infant, ba
r
aby, and child
dren’s
appar in the Un
rel
nited States. Berkshire Par
B
rtners, which had extensi
h
ive experienc investing i the
ce
in
retail and manufac
cturing sector was initia drawn to Carter’s bec
rs,
ally
o
cause of the s
strong brand name
ngth of the s
the co
ompany had developed during its 136
d
6-year history as well as for the stren
y,
s
senior
mana
agement team (See Exhibit 1 for a profil of Berkshir
m.
t
le
re.)
To investigate the option of a potential LBO, Berkshir assembled a five-memb team, to b led
o
t
f
L
re
d
ber
be
by managing dire
ectors Ross Jo
ones and Bra
adley Bloom and senior a
associate Mich
hael Ascione (See
e.
Exhib 2 for biogr
bit
raphical sketc
ches.) The tea would hav less than e
am
ve
eight weeks to move throu all
o
ugh
the stages of a Gol
ldman Sachs-led auction—
—from initial r
research and due diligenc to valuation and
ce
bid st
trategy.
In addition to running the auction and thereby serv
ving as Carter agent, Go
r’s
oldman Sachs (GS)
s
would be offering “staple-on” financing. Under this arr
d
g
rangement, th winning b
he
bidder would have
d
the op
ption to finan the deal th
nce
hrough a prep
packaged capi structure proposed by Goldman Sachs.1
ital
Cart
ter’s
Ca
arter’s was fo
ounded in 18 in Needham, Massach
865
husetts. Over the course o 136 years i the
of
in
highly competitive apparel industry, the company bec
y
e
c
came the lar
rgest branded manufactur of
d
rer
toddle and baby apparel in the United State and also a leading mak of young c
er
a
e
es
ker
children’s clothing.
Divid
ding its mark into five segments—la
ket
ayette (i.e., n
newborn), ba
aby sleepwea baby play
ar,
ywear,
young children’s sleepwear, an young chil
g...