10 most famous privatized listed companies

A private company is any company held in private ownership. Although they may issue stocks and have shareholders, they are not listed on the stock exchange, nor do they trade stocks on the stock exchange. This means that, unlike public companies, they do not need to file documents or comply with the guidelines of the U.S. Securities and Exchange Commission (SEC).

Maintaining privatization provides companies with greater freedom. For example, management can engage in long-term, innovative, high-risk, and high-return venture capital without being restricted by quarterly performance pressure. On the other hand, some listed companies may choose to privatize for a variety of reasons. In most cases, they may be acquired by private companies or venture capital companies that are considered excellent investment opportunities. This means that when delisting from the stock exchange, shareholders will usually receive cash or stocks in a prescribed proportion.

This article looks at the 10 most popular privatized listed companies, which are listed in no particular order.

Key points

  • Maintaining privatization provides companies with greater freedom, and some listed companies may choose to privatize for a variety of reasons.
  • Alliance Boots was the largest acquisition in Europe at the time, valued at US$22.2 billion.
  • Burger King was originally a private company and went public twice before merging with Tim Hortons.
  • HJ Heinz was privatized by Berkshire Hathaway and 3G Capital in June 2013.
  • Reader’s Digest was acquired by Ripplewood Holdings for US$2.62 billion in March 2007. It filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code in 2009 and 2013, and sold it to venture capitalists for 1 pound.

Alliance Boots PLC

The company was listed on the London Stock Exchange (LSE) and maintained the record of the largest acquisition in Europe at the time. The total price is US$22.2 billion. Alliance Boots-commonly known as Boots in the UK-was acquired in 2007 by Kohlberg Kravis Roberts & Co. (KKR) and Italian billionaire Stefano Pessina for approximately £12.4 billion.

This healthcare and pharmacy chain was established in 2006 after the merger of two European companies (the wholesale and retail pharmacy group Alliance UniChem and the British pharmacy Boots Group). The transaction was announced in 2005 and is estimated to be worth £7 billion. Boots was originally founded by John Boot in Nottingham, England in 1849.

The American drugstore Walgreens bought 45% of the private company’s shares in 2012 and paid US$6.7 billion for the transaction, which will take three years to fully implement. Both companies became subsidiaries of the newly formed Walgreens Boots Alliance.

Burger King

Few companies experience more than one initial public offering (IPO). On the other hand, Burger King has two. The restaurant chain was originally a private company and went public in 2006. The stock is traded on the New York Stock Exchange under the ticker symbol BKC. The company raised $425 million when the stock started trading.

The company was subsequently privatized by 3G Capital in 2010. The company bought the restaurant chain for approximately US$3.26 billion. Burger King was re-listed in 2012. 3G Capital and Pershing Square Capital led by Bill Ackman jointly constructed the second IPO and participated in the acquisition of HJ Heinz.

In 2014, Burger King merged with Canadian coffee chain Tim Hortons. It is estimated that the value of the merger is approximately US$18 billion. This led to the establishment of a new company, Restaurant Brands International. Both Burger King and Tim Hortons, which were traded on the Toronto Stock Exchange (TSX), have been delisted and started trading on TSX under the ticker symbol QSR of the newly formed company.

The merger of Burger King and Tim Hortons created a new entity called Restaurant Brands International.

Dell Computer

Dell is one of the world leaders in the manufacture of personal computers, mobile phones, tablets and other hardware accessories. The company is headquartered in Round Rock, Texas, and has approximately 160,000 employees worldwide.

The acquisition of Dell Computer was completed in October 2013. The company’s founder and chief executive officer (CEO) Michael Dell and Silver Lake Partners took the company private for $24.4 billion. The company’s stock was delisted from Nasdaq and the Hong Kong Stock Exchange before privatization.

After spending more than five years as a private company, Dell went public again in 2018. The company achieved this goal by buying back tracking shares in software company VMWare. The value of this transaction is approximately US$24 billion. Michael Dell says he can transform the company while it is private. Dell’s stock is trading at $46 on the New York Stock Exchange (NYSE). As of March 25, 2020, the company’s market value is estimated at $28.3 billion.

Emotional Intelligence Office

Prior to the acquisition, Equity Office Properties Trust was the largest office and commercial property owner in the United States. The acquisition of equity office properties has undergone multiple rounds of high bidding and fierce competition from top bidders. It was finally acquired by Blackstone Group (BX) for USD 39 billion in February 2007. The company has approximately 80 offices nationwide and was renamed EQ Office in 2018.

Heinz

You might recognize the name Heinz from its famous tomato sauce. The company formerly known as Heinz & Noble Company was founded in 1869 by Henry John Heinz. The company produces and sells food in more than 200 countries.

In 2015, the company merged with Kraft Foods Group. The new entity will become the fifth largest food and beverage company in the world. Kraft retained its headquarters in Chicago, while Heinz retained its base in Pittsburgh.

Prior to the merger, Heinz stock was initially traded on the New York Stock Exchange, but was delisted after being acquired by Berkshire Hathaway (BRK-A) and 3G Capital in June 2013. Together with the debt assumed, the transaction is worth approximately 28 billion U.S. dollars.

Panella bread

Panera has more than 2,000 outlets across the country, with annual sales of approximately US$5 billion. The company is traded on Nasdaq under the ticker symbol PNRA. On the last day of the transaction, the stock closed at $314.93 per share.

In April 2017, Panera was acquired by the private investment company JAB Holdings, which also owns brands such as Keurig, Krispy Kreme and Peets Coffee and Tea, with a transaction value of more than US$7 billion.

Hilton Worldwide Holdings

Hilton is the world’s leading hotel and hotel chain, with more than 3,000 hotels in more than 76 countries. The company was founded by Conrad Hilton in 1919 after he purchased his first hotel in Cisco, Texas. The company’s first hotel to use the Hilton name is located in Dallas.

In October 2007, the Blackstone Group purchased the company with a leveraged buyout (LBO) fund of US$26 billion and subsequently delisted from the New York Stock Exchange. Hilton is listed again, assuming it is listed on the New York Stock Exchange in December 2013, with the stock code HLT, and Blackstone holds more than 45% of the company’s equity. The company raised more than $2 billion in its second IPO.

Joan Store

Jo-Ann is one of the largest specialty fabrics and crafts retailers, with more than 850 stores in 49 states in the United States. Jo-Ann was founded in Cleveland in 1943 and is now headquartered in Hudson, Ohio.

The company initially traded on the American Stock Exchange (AMEX) under the name Fabri-Centers of America. The company renamed all stores Jo-Ann Fabrics in 1998. After being acquired by private equity firm Leonard Green for US$1.6 billion, the company was delisted in March 2011.

Kinder Morgan

Kinder Morgan is the second largest oil producer in Texas and one of the largest energy infrastructure companies in North America. The company is also engaged in the distribution, transportation and storage of energy.

The company was privatized in May 2007 and was previously acquired by American International Group (AIG), The Carlyle Group, Goldman Sachs Capital Partners and Riverstone Holdings LLC for $21.6 billion.

About four years later, the company went public again and traded on the New York Stock Exchange under the symbol KMI. According to reports, this second IPO is the largest of its kind supported by private equity.

Reader’s Digest

In addition to Reader’s Digest magazine, which has 50 editions and translations in 20 languages, the group also operates 60 different websites.

In March 2007, Ripplewood Holdings LLC acquired the publisher of the world-renowned popular interest magazine Reader’s Digest for US$2.62 billion. As a result of this private acquisition, it was subsequently delisted from the New York Stock Exchange. The company was plagued by financial problems even before it was privatized, and filed for bankruptcy under Chapter 11 twice-the first time in 2009 and the second time in 2013. In February 2014, venture capitalist Mike Luckwell bought the company for 1 pound.

Bottom line

Although privatization has brought benefits, it may also lead to increased pressure from new private owners. Most transactions to privatize public companies are conducted through investment groups, which may set strict business goals and set tight timetables for company management. In the case of a merger or acquisition, this may also be a red flag for employees. The shareholders of these target companies usually benefit because they usually get a share price premium when they delist.

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