J.W. Childs Associates

J.W. Childs Associates, L.P. is a 27-year-old investment firm based in Boston with a long history of private equity investing, that is today focused on venture capital investments in biotechnology, pharmaceuticals, and health care consumer products. We invest in a variety of ways: direct investments in companies; co-investments alongside external managers; and investments in the funds of investment managers that we regard as partners. We have a longer time horizon with no pre-determined exit date, which distinguishes us from others in the field. We believe this approach provides stability and flexibility to the companies we invest in. In biotechnology and pharmaceuticals, we focus on clinical-stage assets that address important unmet needs in large or growing markets. We are typically Series A or early round investors seeking to build a significant equity stake and play an active role in the development of the company. Areas of interest include neurosciences, oncology, immunology, stem cells, dermatology, and others.

J.W. Childs Associates, L.P.
TypePrivate Ownership
IndustryPrivate Equity
Founded1995 (1995)
FounderJohn W. Childs
HeadquartersBoston, Massachusetts, United States
ProductsPrivate equity funds, Leveraged buyouts
Total assets$3.1 billion[1]
Websitewww.jwchilds.com

History

The firm was founded in 1995 by long-time leveraged buyout investor John W. Childs after a split from Thomas H. Lee. Prior to founding J.W. Childs Associates, from 1987 through 1995 Childs had been a managing director and subsequently the senior managing director of Thomas H. Lee Partners (THL). While at THL, Childs had helped negotiate the buyouts of Snapple Beverages and Ghirardelli Chocolate Company, along with others of the firm's largest investments. From 1971 through 1987, Childs had held various investment positions at the Prudential Insurance Company of America.

J.W. Childs completed a number of large leveraged buyouts including takeovers of several of the following notable companies: Nutrasweet,[2] Chevy's, Empire Kosher, Equinox Fitness,[3] South Beach Beverage Company[4] and Edison Schools.[5]

Additionally, the firm has raised approximately $3.1 billion of investor commitments in three private equity funds:

  • JW Childs Equity Partners (1995) - $352 million
  • JW Childs Equity Partners II (1998) - $983 million
  • JW Childs Equity Partners III (2002) - $1.75 billion
  • JW Childs Equity Partners IV – failed fundraising in 2007 ($2.5 billion target)

The firm began "premarketing" its fourth private equity fund in early 2006, with a target size of $2.5 billion. However, in mid-2007, J.W. Childs decided to postpone the fundraising process because institutional investors were proving less receptive to the offering than had been expected. Performance at two of the firm's previous funds was below median for their respective vintage years and many investment professionals resigned from the firm. Additionally, the fundraising environment for private equity firms became increasingly difficult with the onset of the 2007-2008 credit crunch.[6]

In March 2008, following the failed fundraising for JW Childs Equity Partners IV, JWC registered with the Securities and Exchange Commission for a $200 million IPO of J.W. Childs Acquisition I Corp., a publicly traded special purpose acquisition company(SPAC).[6] Several "fallen" buyout professionals have pursued SPACs (most notably Thomas O. Hicks, formerly of Hicks Muse Tate & Furst) to raise capital when the more common institutional market is unreceptive.[7]

References
  1. Reflects investor commitments since inception
  2. "Monsanto Selling Sweetener Ingredient Business." New York Times, March 28, 2000
  3. Sorkin, Andrew Ross "Fitness Clubs Will Be Sold So a Chain Can Expand." New York Times, December 17, 2000
  4. Hays, Constance L. "SoBe beverages plans a strategy to sustain its heady growth." New York Times, July 20, 2000
  5. Applebome, Peter. "Influx of Money To Expand Edison." New York Times, November 20, 1996
  6. Syre, Steven. "Blank-check investing." Boston Globe, March 25, 2008
  7. J.W. Childs Acquisition I Corp. (S.E.C. Form S-1, March 11, 2008)


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