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Decade of The Deal: THL's Sperling on LBO's wild ride

Published October 2, 2009 at 11:59 AM

In 2006 and 2007, LBO firms indulged in a wild, debt-fueled buying spree that yielded a string of record-shattering deals. In 2006 a $33 billion buyout of hospital chain HCA Inc. broke the LBO size record set back in 1989 by Kohlberg Kravis Roberts & Co.'s storied $31.3 billion takeover of RJR Nabisco. By early 2007, two buyouts had shattered the HCA mark: Blackstone Group LP's (NYSE:BX) $39 billion take-private of Equity Office Properties, which was soon beaten by KKR and TPG Capital's $45 billion deal for Texas utility TXU Corp.

Scott Sperling, co-president of Boston-based Thomas H. Lee Partners LP, a top U.S. private equity firm, was in the thick of the action. In 2006 he helped craft a signature deal of that era, THL and Bain Capital's $25 billion buyout of Clear Channel Communications Inc., a radio and advertising group.

Though Sperling won that bid, he often backed away from buyout battles as multiples ratcheted up and the market turned frothy.

In this installment of Decade of The Deal -- our series commemorating The Deal's 10th anniversary -- Sperling recalls his reaction to the era's excesses and the cracks that formed in the marketplace in 2007, an omen of the coming collapse. See the video above or download it at iTunes. - David Carey

Also see:
Decade of The Deal: Fred Wilson on 1999's dot-com 'casino'
AOL & Time Warner's marriage
Harvey Pitt recalls 9/11
Decade of The Deal: Arthur Andersen's spectacular fall
Decade of The Deal: Kindler on shareholder activism
Read our Decade of The Deal topic center

Decade of The Deal, The Deal magazine and TheDeal.com

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