9-205-058
REV: AUGUST 19, 2011

MALCOLM BAKER
JAMES QUINN

Ber rkshire Partne Bid e ers: dding f Cart for ter’s
In the spring of 2001, Bost o ton-based pri ivate equity firm Berkshi Partners w consider ire was ring a levera aged buyout (LBO) of the William Cart Co., a lead ter ding producer of infant, ba r aby, and child dren’s appar in the Un rel nited States. Berkshire Par
B
rtners, which had extensi h ive experienc investing i the ce in retail and manufac cturing sector was initia drawn to Carter’s bec rs, ally o cause of the s strong brand name ngth of the s the co ompany had developed during its 136 d 6-year history as well as for the stren y, s senior mana agement team (See Exhibit 1 for a profil of Berkshir
m.
t le re.)
To investigate the option of a potential LBO, Berkshir assembled a five-memb team, to b led o t f L re d ber be by managing dire ectors Ross Jo ones and Bra adley Bloom and senior a associate Mich hael Ascione (See
e.
Exhib 2 for biogr bit raphical sketc ches.) The tea would hav less than e am ve eight weeks to move throu all o ugh the stages of a Gol ldman Sachs-led auction—
—from initial r research and due diligenc to valuation and ce bid st trategy. In addition to running the auction and thereby serv ving as Carter agent, Go r’s oldman Sachs (GS) s would be offering “staple-on” financing. Under this arr d g rangement, th winning b he bidder would have d the op ption to finan the deal th nce hrough a prep packaged capi structure proposed by Goldman Sachs.1 ital Cart ter’s Ca arter’s was fo ounded in 18 in Needham, Massach
865
husetts. Over the course o 136 years i the of in highly competitive apparel industry, the company bec y e c came the lar rgest branded manufactur of d rer toddle and baby apparel in the United