By  on November 24, 2010


TPG Capital has a history of revisiting its investments and partnering with other private equity firms.

In collaborating with Leonard Green & Partners in the $3 billion deal to acquire J. Crew Group, TPG is returning to the company in which it held an equity interest for 12 years — from its acquisition of a majority stake in the New York-based retailer in 1997, through the company’s initial public offering in 2006 and until it sold its remaining 2.8 million shares of J. Crew stock last year.

TPG, which owns Neiman Marcus along with Warburg Pincus, went the reacquisition route with Leonard Green when the firms made a $200 million investment in Petco in 2000. They saw a substantial profit when Petco went public two years later and returned for a second round of equity in 2006, reacquiring the company for about $1.8 billion. That transaction generated a lawsuit from former Petco shareholders, who alleged the firms failed to adequately consider other offers to acquire the company and adequately return value to the stockholders. The suit was settled this year.

TPG, founded in 1992 as Texas Pacific Group, has about $48 billion under management.

Leonard Green, which says it has about $9 billion under management, has visited the fashion and beauty space on several occasions in its 21-year history. Investments include David’s Bridal, a May Department Stores property sold by Macy’s after its merger with May; The Sports Authority; Authentic Brands Group; Rite Aid Corp. and Tourneau. Although TPG holds a far larger stake, Green also includes Neiman Marcus in its portfolio.

In addition to its affiliation with Warburg Pincus on Neiman Marcus, TPG joined with Bain Capital and Goldman Sachs in the acquisition of Burger King, and with Sony on the 2005 purchase of Metro-Goldwyn-Mayer. Not all of its dealings have gone as planned: MGM filed for bankruptcy this month, and the fate TPG’s 23 percent stake is still to be determined.

In June, London-based Change Capital Partners LLP sold Republic, a U.K. denim and sportswear retailer, to TPG for 300 million pounds, or about $447 million at the exchange rate at that time. This month, TPG bought Avon Products’ 74.7 percent stake in Avon’s Japanese subsidiary for about $89.9 million and was the lead investor in a $45 million capital infusion for China Vogue Casualwear, a Chinese sportswear firm.

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