Thomas H. Lee, pioneer of leveraged buyouts, dies at 78

() — Thomas H. Lee, a private equity financier who pioneered the use of leveraged buyouts that helped reshape corporate America, has died, according to a notice from his former company that still bears his name.

“We are deeply saddened by the unexpected passing of our good friend and former partner, Thomas H. Lee,” said a release of Thomas H. Lee Partners LP, the company he founded in 1974. “Tom was an iconic figure in private equity. He helped pioneer an industry and mentored generations of young professionals who followed in his footsteps.”

A senior police official told that preliminary analysis suggests Lee, 78, died of a self-inflicted gunshot wound while at his Fifth Avenue offices on Thursday. Officials are awaiting the forensic medical report to determine the cause of death.

Lee was one of the leaders in the use of leveraged buyouts (or LBOs). In LBO, a buyer will borrow money to make a purchase, typically using the acquired company’s future profits to pay off the loan. The goal is often to sell the company in a relatively short period of time for a higher price, either to another buyer or by taking it public.

One of Lee’s most famous and lucrative leveraged buyouts was his purchase of Snapple for $135 million in 1992. Lee sold it to a competitor, Quaker Oats, in 1994 for $1.7 billion. Quaker Oats soon after sold Snapple for just $300 million, a huge loss.

Unlike many private equity firms, Lee’s firm did not have a reputation for making massive cost cuts, such as layoffs of deep staff, to increase the value of the company it acquired and increase its value before a sale. He was able to increase Snapple’s value prior to its sale to Quaker Oats primarily by growing the company and its sales, reportedly increasing revenue from US$95 million a year to US$750 million.

“He’s that rare thing on Wall Street, a really nice guy,” Forbes said in a 1997 profile of him.

Lee left THL in 2006 and started another private equity firm, Lee Equity Partners. His bio on the firm’s site said over the past 46 years he has invested $15 billion of capital in hundreds of transactions.

Lee started in the business as an analyst in the Institutional Research Department of LF Rothschild & Company. He then moved to First National Bank of Boston, where he rose to the position of vice president and led the bank’s high-tech lending group. He founded Thomas H. Lee Partners in 1974.

Forbes estimated his net worth at the time of his death at $2 billion.

He has also been active in philanthropy. According to his firm’s biography, he has currently or in the past served as trustee of the Lincoln Center for the Performing Arts, the Museum of Modern Art, NYU Langone Medical Center, and the Whitney Museum of American Art, among other civic and charitable organizations. .

“The family is extremely saddened by Tom’s death,” family friend and spokesman Michael Sitrick said in a statement. release. “While the world knew him as one of the pioneers in the private equity business and as a successful businessman, we knew him as a devoted husband, father, grandfather, brother, friend and philanthropist who always put the needs of others before yours. Our hearts are broken.”

Editor’s note: If you are in the US and you or a loved one have contemplated suicide, call national helpline Suicide Crisis Call 988 or 1-800-273-Talk (8255) to connect with a trained counselor. Outside the United States, the International Association for Suicide Prevention provides a worldwide directory of international resources and hotlines, also in Befrienders Worldwide.