"Pagliuca propelled by corporate mind, personal touch" by Casey Ross and Eric Moskowitz, Globe Staff | November 19, 2009
The improvised transaction closed midnight July 3, eventually earning a 1,500 percent return for Pagliuca and his investors, a landmark success that launched his career at Bain Capital, where he helped build one of the largest buyout shops in the world....
In the campaign, Pagliuca, 54, is pledging to use his business acumen to reform the health care and financial systems and build a better life for the middle class....
Over nearly 30 years at Bain, Pagliuca helped lead dozens of buyouts, including multibillion-dollar acquisitions of Burger King and Hospital Corp. of America. In 2002, he was one-third of an ownership team that bought the Boston Celtics, who won an NBA title six years later. This year he made a bid for the Globe. But like Bain founder and former governor Mitt Romney, Pagliuca’s career in private equity contains points of conflict with his pitch as a progressive Democrat who knows how to create jobs for struggling families. His work buying and restructuring companies made hundreds of millions of dollars for him and Bain investors, but sometimes involved the layoffs of hundreds.
You decide how you feel about that, voter.
In the closing weeks of the primary, his challenge is to get voters to see beyond his ubiquitous campaign ads and inevitable comparisons to Romney - a man whose business skill and income bracket he shares, but whose life story he does not. Viewed from a distance, Pagliuca’s career has an almost Forrest-Gump-like quality - fueled by hard work, serendipitous encounters, and pluck....
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In his first major buyout negotiation over Gartner, Pagliuca ended up across the negotiating table from Robert Louis-Dreyfus, an internationally-renowned buyout artist. They hit it off after Pagliuca picked him up at Logan International Airport in his used Mercury Grand Marquis and took him to a restaurant in the North End, where they sketched out the makings of the $70 million deal on cocktail napkins. After becoming an owner of the Celtics, Paglicua would break bread with star athletes like Kobe Bryant and LeBron James, who came to refer to him casually as “Pags.’’ He attended the Obama inaugural with Celtics guard Ray Allen.
But this life of privilege did not start from privileged origins. He grew up in Framingham, and later Basking Ridge, N.J., the son of a middle-school teacher and a salesman. A stand-out student in high school, Pagliuca was admitted to Duke University, where he rode the pine on the freshman basketball team. He later graduated from Harvard Business School. To pay off his Harvard loans, he took a high-paying summer job with Bain & Co., in the emerging field of strategy consulting. He loved the caliber of the people, the work of studying industries, and the challenge of trying to help companies grow. He quickly earned a full-time job offer....
Regular guy, rising star
With a fortune worth at least $260 million, a $6.6 million seven-bedroom, eight-bathroom mansion in Weston, and a lakefront vacation home in New Hampshire, Pagliuca has some of the trappings of extraordinary wealth. But he does not always play the part.
Related: Wealthy Responsible For Global Warming
His clothes are often rumpled, his shirt half-tucked and collar askew. On game nights, he sometimes parks a 2005
Romney was Pagliuca’s first boss at Bain Capital and oversaw his earliest investments. Personally, they were opposites in many ways - Pagliuca self-deprecating, Romney polished and perfectly coiffed - but they relied on each other to grow the business. In 1989, Romney tapped Pagliuca to lead a new $60 million venture focused on medical and technology investments. It was high-stakes work, especially with Pagliuca and Bain’s partners personally investing heavily in the firm’s acquisitions....
Starting with the Gartner purchase in 1990, Pagliuca cut a series of successful deals. He then led Bain’s $10 million investment Physio Control Corp., a maker of emergency defibrillators. Bain revamped its struggling technology and cashed out 17 months later for $172 million. In 1995, a buyout of contact lens maker Wesley Jessen was an even bigger home run, netting $350 million for Bain, about 40 times its initial investment.
The successes fueled bigger and bolder investments, with Pagliuca helping to lead Bain’s participation in the $2.6 billion buyout of Burger King and a $21 billion deal for Hospital Corp. of America. His dream deal came in the summer of 2002, when Wyc Grousbeck, a friend and Boston venture capitalist, approached him with an opportunity to buy the Celtics....
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In business terms, many of Pagliuca’s deals were tremendously successful. But some also carried harsh consequences for the acquired companies and their employees, causing factories to shut down and scores of people to lose their jobs, even, at times, as Bain and its partners made millions.
That DESERVES the HIGHLIGHT and CODING in this day an age!
Big, troublesome deal
In 1994, Bain undertook a mammoth acquisition, the $448 million buyout of Dade International, a struggling manufacturer of medical diagnostic equipment. It was the biggest deal of Pagliuca’s career, but it would also become the most troublesome: It ultimately led to multiple rounds of layoffs, a bankruptcy, and questions about Bain’s tactics. Bain teamed up in the deal with the private equity arm of
Need I even comment?
During the next three years, Bain made a series of carefully targeted acquisitions, buying a division of E.I. duPont de Nemours and Co. and Behring Diagnostics, another maker of medical testing equipment. The moves increased Dade’s sales and technical expertise, but also involved forced relocations and layoffs. With Pagliuca on Dade’s board of directors, the firm slashed 700 jobs after the duPont merger. After Behring, it closed two factories in Miami and another in Westwood, Mass., affecting more than 1,100 employees. Forty-five people were laid off in Westwood, and 215 others were told they could transfer to factories in Georgia, Delaware, or Connecticut. The 850 employees in Miami were told they could move to Germany or Delaware.
I don't think they will be voting for Steve.
For Charlie DeAngelis, a mechanical engineer who worked in product design, the Westwood closure meant an end to a job he had relished for eight years. “It was just a great place to work, with great people. Everybody really enjoyed it there,’’ DeAngelis said. “And then Bain Capital came in.’’ Now 45, DeAngelis said he harbors no ill will toward Pagliuca. He said he might vote for him.
The Glob found the only guy who forgave him.
Pagliuca said the job cuts at Dade were necessary to improve its performance. “The outcome was that the company then grew,’’ he said. By the end of 1998, Dade had increased its annual sales to $1.2 billion, up from $670 million in 1994. Its annual income during that period increased to more than $150 million from $50 million. With the company on the rise, Bain and Goldman started considering a sale. The firms arranged what is known as a leveraged recapitalization, a mechanism often used by private equity firms to recoup their investment by extracting a large dividend from the companies they acquire. The drawback for the acquired company is that it is forced to borrow to pay the dividend, leaving it with a heavier debt load and little margin for error in case of a sudden market disruption or economic downturn.
Ummmm, I DON'T WANT HIM ANYWHERE NEAR the SENATE!!!
Sorry to break my pledge to you, readers, but WTF?!!!
In June 1999, Bain and Goldman cashed in their stock for $365 million, recouping four times their initial investment.... At the time, the move was seen as a win for all the owners, but it nearly tripled the company’s debt. The next year, 2000, Dade’s earnings plummeted 27 percent, due largely to a decline in the value of the euro, which cut into the company’s revenue in Europe. Dade, with Pagliuca still on its board, enacted an emergency cost-cutting plan that eliminated hundreds of additional employees.
In August 2002, Dade, still saddled with debt from the Bain payout, filed for Chapter 11 bankruptcy protection, which led to scrutiny of the profits made by Bain and Goldman. A committee representing Dade’s creditors investigated the 1999 recapitalization and other matters, asserting its intention to pursue claims of, among other things, “illegal dividends,’’ according to SEC filings. Although they denied the charges, Bain and Goldman and other entities agreed to pay $68 million to Dade to avoid lengthy litigation. The tumult at the company is one of a few thorny deals at Bain that resulted in bankruptcies and job cuts, but Pagliuca says he should be judged by the entirety of a career in which many firms grew under his stewardship. As for Dade, Pagliuca said he remained with the company through its restructuring. Today, it is one of the largest players in the medical diagnostic business.
“We did the best we could....’’
NOT GOOD ENOUGH (although it has worked out splendidly for you, Steve)!
Related: Senate Candidate Misses Three-Point Shot
Massachusetts Meets Its Next U.S. Senator
This isn't going to help him, either:
"Pagliuca sees a role for lobbyists; Firm’s record at odds with campaign stance" by Frank Phillips, Globe Staff | November 16, 2009
Bain Capital Partners, where he has been a senior managing partner and made his huge fortune, has spent millions to hire high-powered Washington lobbyists to protect its special interests on Capitol Hill. It’s an aspect of his professional background that is in sharp contrast to his effort to portray himself to voters as a progressive populist Democrat and reformer.
He sure took to politics quick, didn't he?
A campaign spokesman said Pagliuca’s tough talk about the flow of lobbyist donations to politicians should not be seen as an attack on lobbyists participating in the legislative process.
“Steve appreciates the role lobbyists play in educating policy makers on the impact of legislation under consideration,’’ his press aide Will Keyser said. “At the same time, he believes it is wrong for lobbyists and special interest PACs to be a critical source of campaign funding for members of Congress.’’
But Pagliuca’s embrace of a key campaign finance reform ignores the role he and his colleagues have played in using those same elite lobbying entities to advance their special interests in Washington.... Thanks to their lobbyists, Bain’s senior executives continue to pay federal taxes at rates far below those applied to most taxpayers. A significant portion of their profits is taxed as capital gains, at a 15 percent rate, compared with the 35 percent rate they would pay if it were classified as regular income. Even a taxpayer making just $34,000 a year would have to pay a rate of 25 percent.
For the last two years, the private equity companies have been able to stall a proposal from the Democratic House - and more recently from President Obama - that would tax those earnings as regular income. According to federal disclosure records, Bain paid nearly $2 million to two major Washington lobbying firms - Public Strategies and Akin, Gump - over the past three years to influence Congress on health care reform, financial regulation, and taxation of private equity funds. Bain also joined 11 other of the nation’s largest funds to create the Private Equity Council in late 2006. One of the group’s top priorities is killing the Democrats’ proposal to tax private equity profits at a higher rate.
It has also sought to blunt some of the Democrats’ stricter financial regulatory proposals. The council has paid $8.5 million since 2007 to hire a half-dozen of Washington’s most influential lobbying firms to look after the equity funds’ interests, the records show. Bain, on its own, also paid $310,000 last year to Public Strategies for work that included pressuring lawmakers on the tax issue. The showdown came at the House Financial Services Committee, which approved a bill that would treat some of the equity funds’ profits as income. The full House passed the measure in late 2007, but the Senate never took up the proposal....
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Try another issue, Steve.
"Pagliuca takes on foes on health care; In a notably tepid Senate campaign, he provokes heated replies by rivals" by Matt Viser, Globe Staff | November 20, 2009
The placid campaign for US Senate was jolted yesterday by an unusually heated exchange, as Boston Celtics co-owner Stephen G. Pagliuca criticized two of his rivals over health care and both of them immediately fired back, with one directly attacking Pagliuca’s wealth.
“I’m certainly not going to take any lectures from someone who gave money to George Bush and supported Mitt Romney against Ted Kennedy, has hired lobbyists to block Wall Street reform, and made a fortune in part by gutting KB Toys, a great Massachusetts company, costing thousands of workers their jobs and their health insurance,’’ US Representative Michael E. Capuano said shortly after Pagliuca held a press conference in Boston to criticize Capuano and Attorney General Martha Coakley for pledging to oppose a national health care overhaul if it restricts insurance coverage of abortion.
Within minutes of Pagliuca’s press conference, Coakley met with reporters and called Pagliuca’s description of the health care debate “a false choice’’ and “a red herring.’’
Capuano’s response, in the form of two written statements issued shortly after Pagliuca spoke, was a bit loose with the facts: Pagliuca was not among Bain directors involved in the KB buyout and did not serve on KB’s board of directors. But the exchange shows the degree to which the campaign’s temperature has risen with just 18 days left until the primary election....
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"Candidates spar at BU forum over green credentials" by Matt Viser, Globe Staff | November 18, 2009
Seeking to woo environmentalists, the four Democrats running for US Senate held a virtual green-off yesterday, touting the gas-friendly vehicles they drive, the clean energy policies they support, and their own minor contributions to saving the planet....
During a 90-minute forum held at Boston University and sponsored by several environmental groups, all the candidates said more should be done to combat global warming, and all said they would promote public transportation as a way to lower carbon emissions. And, in a significant break with the late Senator Edward M. Kennedy, the man they are running to succeed, all have said they support a wind farm in Nantucket Sound....
The four Democrats, who will face off in a special primary election Dec. 8, differed slightly on how they would vote on a pending climate change bill, which currently includes incentives for nuclear power and offshore drilling....
All four candidates said they oppose such drilling....
All of the candidates professed to recycle....
Boston Celtics co-owner Stephen Pagliuca....
compost piles in backyard....
claims to have a beanstalk growing out of his....
Pagliuca said he has a Lexus hybrid as well as a 10-year-old Lexus he’s hoping to soon replace....
None could define the term ocean acidification, and when Pagliuca tried unsuccessfully to explain it, the crowd groaned....
And the candidates did some fancy footwork to deal with a question about whether they would loosen federal protection of seals in response to complaints from fishermen who say a rebounding seal population is harming their catch. Pagliuca, to laughter, said, “As someone who can’t kill a fly, I think I would have a hard time killing a seal. But maybe we could bring sharks in.’’
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"Foreign trip experience in Senate race varies; Coakley less well-traveled; Capuano goes mostly on policy-oriented jaunts" by Matt Viser, Globe Staff | November 29, 2009
In the short campaign to succeed Edward M. Kennedy - who spent part of his childhood in London and was a leading international voice on a wide range of foreign policy issues - the public discussion has focused mostly on domestic issues such as health care and the economy. But foreign policy is likely to take center stage this week, because President Obama plans to address the nation Tuesday night about Afghanistan, and the four Democratic Senate candidates in Massachusetts have a televised debate scheduled during the hour before the president’s speech.
A chief role of a US senator is to weigh in on matters that have an impact across the globe, including the ratification of treaties; the senior senator from Massachusetts, John F. Kerry, is the chairman of the Senate Foreign Relations Committee. The four Democratic Senate candidates, who will face off in a primary election Dec. 8, have had no significant foreign policy differences, but bring very different kinds of personal experience to the debate....
Pagliuca, a managing director at Bain Capital, has been on at least 119 trips abroad, according to a campaign review of his passports and business schedules. He was at the Olympics in Beijing, traveled to Davos, Switzerland, for the World Economic Forum, and has been on several trips to the Middle East. Just after he graduated high school his family moved to Japan, where his father worked for a chemical company. And for three years after college, Pagliuca lived in Scheveningen, Holland, working with an accounting firm and learning Dutch from a nun.
Pagliuca believes his familiarity with other countries would be an asset in the Senate:
“Maybe it hasn’t come up because of the lack of experience of the other candidates, but I’ve raised it everywhere I’ve been. Having an understanding of those cultures and those people are absolutely critical for senators of the future. The world is global.’’
--more--"So who likes Pags?
"Pagliuca has received support from several prominent NBA players....
I don't think that is going to get it done.
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So what do the POLLS say?
"Coakley leads, but electorate unsettled; In Globe poll, 50 percent remain undecided; Capuano running 2d, but far behind AG" by Frank Phillips and Matt Viser, Globe Staff | November 22, 2009
Attorney General Martha Coakley has a solid lead in the four-way Democratic race for the open US Senate seat, but with just 16 days until the primary election, nearly three-quarters of likely voters have yet to decide who they will support, according to a Globe poll.
Coakley gets the support of 43 percent of respondents when asked who they would vote for if the primary were held today. US Representative Michael Capuano has support from 22 percent of the likely voters; Boston Celtics co-owner Steve Pagliuca from 15 percent, and City Year cofounder Alan Khazei from 6 percent.
Not quite worth all the dough you laid out, huh, Steve?
The poll indicates Coakley is in a position of formidable strength among the state’s likely Democratic primary voters. Fully 71 percent of the respondents viewed Coakley favorably. She is by far the best-known candidate, with 91 percent name recognition. She is the candidate the likely voters see as the most qualified, best able to understand the problems of people like them, most desirable to have a beer with, and most likely to win....
Seeing as Pags owns the Celtics I bet he would be a good time!!
Won't win you an election, but....
