Public companies are an integral part of the global economy, but some of them choose to go private at certain points in their corporate journey. Going private allows companies to operate without the pressure of public markets and quarterly earnings expectations, giving them the freedom to focus on long-term growth and high-return ventures. In this article, we will explore ten well-known public companies that made the strategic decision to transition to private ownership and how it impacted their trajectories.
- Twitter – Now X Corp.
In April 2022, the social media giant Twitter accepted a $44 billion buyout offer from the visionary entrepreneur Elon Musk. Musk, known for his leadership at Tesla, Inc., acquired a 9.2% stake in Twitter and spearheaded its transformation. As a private company under the new name “X Corp.,” Twitter aims to preserve free speech while enhancing user experience and features.
- H.J. Heinz
A beloved name in the condiment industry, Heinz, joined forces with Warren Buffett’s Berkshire Hathaway and 3G Capital in 2013, in a landmark deal worth approximately $28 billion. This partnership led to the formation of The Kraft Heinz Company, with Berkshire Hathaway and 3G Capital holding a 51% stake in the combined entity.
- Burger King
Burger King, a prominent fast-food restaurant chain, embarked on an intriguing journey of going private and public again. After a $4 billion buyout by 3G Capital in 2010, the company relisted as a public entity in 2012 following a reverse merger with London-listed Justice Holdings. Subsequently, Burger King expanded its portfolio by acquiring the Canadian coffee chain Tim Hortons, forming Restaurant Brands International.
- Dell Computer
In a historic move, Michael Dell, the visionary founder of Dell Computer, took the company private in 2013 through a $24.4 billion deal with Silver Lake Partners. Afterward, Dell returned to public markets in 2018 following a transformative acquisition of EMC, and in 2021, spun off VMWare into a separate publicly listed company.
- Alliance Boots PLC
A significant player in the European healthcare and pharmacy sector, Alliance Boots PLC underwent the biggest leveraged buyout in Europe when KKR and Stefano Pessina acquired the company for $22.2 billion in 2007. Later, U.S. pharmacy chain Walgreens purchased the remaining stake, leading to the formation of Walgreens Boots Alliance.
- EQ Office
Equity Office Properties Trust, the largest publicly listed owner of office and commercial properties in the U.S., became a part of Blackstone Group in 2006 for a staggering $36 billion. The company was subsequently renamed EQ Office in 2018.
- Hilton Worldwide Holdings
Founded by Conrad Hilton in 1919, Hilton Worldwide Holdings is a renowned global hotel franchise. It went private in 2007 through a $26 billion leveraged buyout by Blackstone Group, and later, in 2013, it made a successful return to public markets.
- Kinder Morgan
Kinder Morgan, a major energy pipeline and storage company in North America, was acquired by a consortium of investors in 2007 for about $22 billion. It re-entered the public sphere less than four years later, offering a 15.5% stake in its IPO.
- Panera Bread
In 2017, Panera Bread, a leading restaurant chain, was acquired by the private investment firm JAB Holding Company in a deal worth over $7 billion. Although plans for an IPO were considered, Panera Brands chose to remain private.
- Reader’s Digest
A publishing institution, Reader’s Digest, experienced changes in ownership when it was acquired by Ripplewood Holdings LLC in 2007 for $2.4 billion. Despite financial challenges, the company rebranded itself as Trusted Media Brands in 2015.
The transition from a public to a private company is a strategic move that allows businesses to explore new opportunities and long-term growth without the pressure of public markets. While private ownership offers various advantages, many companies eventually return to public markets, providing new investment opportunities and exit strategies for their private owners. These well-known examples demonstrate the dynamic nature of corporate finance and the intricacies involved in navigating the paths of public and private ownership.
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