5 Berkshire Partners Bidding For Carter S
9-205-058
REV: AUGUST 19, 2011
MALCOLM BAKER
JAMES QUINN
Berrkshire e Partne ers: Bid dding ffor Cartter’s
In the spring of o 2001, Bostton-based priivate equity firm Berkshiire Partners w was considerring a levera aged buyout (LBO) of the William Cartter Co., a lead ding producerr of infant, baaby, and child dren’s apparrel in the Un nited States. Berkshire
B
Parrtners, which h had extensiive experiencce investing iin the retail and manufaccturing sectorrs, was initia ally drawn to o Carter’s beccause of the sstrong brand name ngth of the ssenior the co ompany had developed during d its 136
6-year history y, as well ass for the stren mana agement team
m. (See Exhibitt 1 for a profille of Berkshirre.)
To
o investigate the t option off a potential LBO,
L
Berkshirre assembled d a five-memb ber team, to b be led by managing direectors Ross Jo ones and Bra adley Bloom and senior aassociate Mich hael Ascionee. (See
Exhib
bit 2 for biogrraphical sketcches.) The tea am would hav ve less than eeight weeks to o move throu ugh all the stages of a Golldman Sachs--led auction—
—from initial rresearch and due diligencce to valuation and bid sttrategy.
In addition to running the auction and thereby serv ving as Carterr’s agent, Go oldman Sachss (GS) would d be offering g “staple-on” financing. Under this arrrangement, th he winning b bidder would d have the op ption to finan nce the deal th hrough a prep packaged capiital structure proposed by Goldman Sachs.1
Cartter’s
Ca
arter’s was fo ounded in 18
865 in Needham, Massach husetts. Over the course o of 136 years iin the highly y competitivee apparel industry, the company c beccame the larrgest branded d manufacturrer of toddleer and baby apparel a in thee United Statees and also a leading mak ker of young cchildren’s clothing.
Divid
ding its mark ket into five segments—la ayette (i.e., n newborn), baaby sleepweaar, baby play ywear, young g children’s sleepwear, s an nd young chilldren’s playw wear—the com mpany sough ht to
REV: AUGUST 19, 2011
MALCOLM BAKER
JAMES QUINN
Berrkshire e Partne ers: Bid dding ffor Cartter’s
In the spring of o 2001, Bostton-based priivate equity firm Berkshiire Partners w was considerring a levera aged buyout (LBO) of the William Cartter Co., a lead ding producerr of infant, baaby, and child dren’s apparrel in the Un nited States. Berkshire
B
Parrtners, which h had extensiive experiencce investing iin the retail and manufaccturing sectorrs, was initia ally drawn to o Carter’s beccause of the sstrong brand name ngth of the ssenior the co ompany had developed during d its 136
6-year history y, as well ass for the stren mana agement team
m. (See Exhibitt 1 for a profille of Berkshirre.)
To
o investigate the t option off a potential LBO,
L
Berkshirre assembled d a five-memb ber team, to b be led by managing direectors Ross Jo ones and Bra adley Bloom and senior aassociate Mich hael Ascionee. (See
Exhib
bit 2 for biogrraphical sketcches.) The tea am would hav ve less than eeight weeks to o move throu ugh all the stages of a Golldman Sachs--led auction—
—from initial rresearch and due diligencce to valuation and bid sttrategy.
In addition to running the auction and thereby serv ving as Carterr’s agent, Go oldman Sachss (GS) would d be offering g “staple-on” financing. Under this arrrangement, th he winning b bidder would d have the op ption to finan nce the deal th hrough a prep packaged capiital structure proposed by Goldman Sachs.1
Cartter’s
Ca
arter’s was fo ounded in 18
865 in Needham, Massach husetts. Over the course o of 136 years iin the highly y competitivee apparel industry, the company c beccame the larrgest branded d manufacturrer of toddleer and baby apparel a in thee United Statees and also a leading mak ker of young cchildren’s clothing.
Divid
ding its mark ket into five segments—la ayette (i.e., n newborn), baaby sleepweaar, baby play ywear, young g children’s sleepwear, s an nd young chilldren’s playw wear—the com mpany sough ht to