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Fox Paine & Company

From Alfawiki
Fox Paine & Company
Company typePrivate
IndustryPrivate equity
Founded1996
FounderSaul A. Fox
Headquarters
Woodside, California
,
United States
Area served
United States
ProductsLeveraged buyout transactions

Fox Paine & Company is a private equity firm that concentrates on leveraged buyout transactions. Established in 1996 by Saul A. Fox, a former partner at Kohlberg Kravis Roberts, the company expanded in 1997 when W. Dexter Paine III, previously with Kohlberg & Co., joined as co-founder. Following legal disputes in 2007, the original partners parted ways: Fox kept the firm's name, while Paine launched Paine & Partners along with most of the original investment team.[1][2]

The firm’s investment portfolio spans numerous industries such as property and casualty insurance, software, semiconductors, agribusiness, healthcare, energy, telecommunications, industrial manufacturing, consumer personal care products, and medical diagnostics.

Initially headquartered in Foster City, California, Fox Paine has since relocated to Woodside, California.

History

After spending 12 years at KKR and working as a tax attorney at Latham & Watkins, Saul Fox founded the firm. Originally incorporated as Fox Capital, Inc., he sought to strengthen the enterprise by bringing on a partner. In 1997, he teamed up with Dexter Paine, whose background included roles at Bankers Trust, Robertson Stephens, and Kohlberg & Co. Their previous collaboration involved financing the successful leveraged buyout of Motel 6.[2]

In April 1998, Fox Paine closed its inaugural fund ("Fund I") with commitments totaling $500 million. By October 1999, this capital was fully deployed across seven acquisitions including ACMI Corporation (exited in 2005), Alaska Communications (2006), Byram Healthcare (sold in 2008 by Paine & Partners), Maxxim Medical (filed for bankruptcy in 2003), United American Energy Corp. (2003), and WJ Communications (sold in 2008 by Paine & Partners).[3][4]

The second fund was launched in 2000 with a target of $750 million but ultimately closed at $1 billion by early 2001. It generated an internal rate of return (IRR) of 30.7%, featuring investments such as Advanta (agronomic seeds), Erno Laszlo, L'Artisan Parfumeur, Paradigm B.V., Penhaligon's, Seminis, United America Indemnity (now Global Indemnity Group), and VCST Industrial Products.[2][3]

Fox Paine gained recognition on the West Coast for its innovative approach to complex transactions.[2]

By 2005, divergent views emerged regarding Fund III’s launch: Paine supported raising the new fund while Fox preferred concentrating on managing existing assets. The resulting Newco Agreement in February 2006 permitted Paine to establish "Newco" (later Fox Paine Management III) to independently oversee Fund III while licensing the Fox Paine brand; meanwhile, Fox remained CEO of Fox Paine & Company and invested $5 million for a minority interest in Fund III’s general partnership.[1][2][5]

Relations soured shortly after this agreement. Conflicts arose concerning personnel transfers—Paine hired Fox Paine’s CFO Amy Ghisletta onto Fund III’s payroll despite Fox’s objections—and control over portfolio companies and hiring decisions. Litigation commenced in August 2007 involving mutual allegations of contract breaches and fiduciary misconduct.[1][2][5]

The December 2007 settlement divided ownership: Fox retained Fund II assets and the company name; Paine acquired Fund III along with his legacy interests from Fund I. He rebranded his entity as Paine & Partners (later Paine Schwartz Partners) but continued to share office space with Fox Paine without formal association.[1][6]

Although intended to finalize separation, disputes continued until a final resolution was reached in August 2012.[6]

Since then, Fox Paine has concentrated on enhancing value from remaining Fund II investments. A significant milestone occurred in August 2020 when Global Indemnity Group—the last remaining Fund II portfolio company—completed its re-domestication to the United States.[7]

See also


External links

  1. ↑ 1.0 1.1 1.2 1.3 Cite error: Invalid <ref> tag; no text was provided for refs named settlement
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 Cite error: Invalid <ref> tag; no text was provided for refs named bitterend
  3. ↑ 3.0 3.1 Cite error: Invalid <ref> tag; no text was provided for refs named sequel
  4. ↑ "Fox Paine Sells ACMI Unit for $500M." San Francisco Business Times, June 16, 2005
  5. ↑ 5.0 5.1 Cite error: Invalid <ref> tag; no text was provided for refs named foxvspaine
  6. ↑ 6.0 6.1 Cite error: Invalid <ref> tag; no text was provided for refs named litigation
  7. ↑ "Global Indemnity Completes Redomestication to the United States." Globe Newswire, August 28, 2020
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