Thomas H. Lee: Pioneer Of Leveraged Buyouts, Died At The Age Of 78

Lee Equity Partners LLC’s co-founder and CEO, Thomas Lee. According to a notice from his former company, which still retains his name, Thomas H. Lee, a private equity financier who invented the use of leveraged buyouts and helped to reshape corporate America, has passed away.

What Happened?

In a leveraged buyout, the buyer borrows money to fund the transaction and usually uses the future profits of the acquired business to recoup the loan. The objective is frequently to sell the business quickly for a greater price, either to another buyer or by going public.

Thomas Lee’s acquisition of Snapple for $135 million in 1992 was one of his most well-known and successful leveraged buyouts. Lee sold it to Quaker, a rival.

A Great Person

In contrast to many other private equity firms, Lee’s company didn’t have a reputation for imposing significant cost reductions, like mass layoffs of employees, in order to increase the value of the company it purchased and increase its value before a sale. Before selling Snapple to Quaker Oats, he allegedly increased revenue from $95 million annually to $750 million by expanding the business and increasing sales.

In a 1997 profile of him, Forbes noted that “he’s that rare thing on Wall Street — a truly nice person.”

In 2006, Lee ceased operations at THL and founded Lee Equity Partners. According to his biography on the company’s website, he has spent $15 billion over the past 46 years.

Thomas H. Lee
Source: CNN

About His Career

Lee began his career at L.F. Rothschild & Company as an analyst in the institutional research division. He next relocated to First National Bank of Boston, where he worked his way up to vice president and oversaw the bank’s high tech loan division. In 1974, he started Thomas H. Lee Associates.

He has also been involved in charitable work. His firm’s biography states that he is presently serving as trustee of the Whitney Museum of American Art, the Museum of Modern Art, NYU Langone Medical Center, and Lincoln Center for the Performing Arts, among other civic and charitable organisations.

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