Before the Levi’s IPO, there was the 1985 buyout led by iconoclastic S.F. investor Warren Hellman

Products You May Like

Levi Strauss & Co., the 166-year-old bluejeans maker, went public on Thursday and closed its debut week with an $8.6 billion market cap. It’s the first time the company has traded publicly since 1985, when a San Francisco-based financier named Warren Hellman helped lead a $1.6 billion buyout.

Hellman wasn’t particularly well-known at the time, having just started his private equity firm, Hellman & Friedman, a year earlier, following over a decade on Wall Street and early venture capital. But until his death in 2011 from complications related to leukemia, Hellman became a Bay Area giant as an investor, philanthropist and general hometown hero.

He donated money to the ballet, a local health clinic, journalism and personally funded a $400,000 campaign for a museum’s underground parking garage. He also started and financed Hardly Strictly Bluegrass, an annual multi-day festival in Golden Gate Park that’s free for attendees and attracts hundreds of thousands of fans to see artists such as Emmylou Harris and Steve Earle.

But it all started with Levi’s, which his firm took private along with the Haas family, who were the principal owners of the business as descendants of Levi Strauss.

Levi’s “certainly put Hellman & Friedman on the map,” said Marco “Mick” Hellman, Warren’s son, in an interview this week after the IPO. Mick, who has three sisters, was a managing director at Hellman & Friedman from 1987 until 2001, and since 2008 has run his own firm, HMI Capital. “They still would’ve been successful, but the firm would have been in a different place if not for that deal.”

Hellman got an advisory fee of $7 million for the deal, according to Fortune, and a 2.2 percent stake in Levi’s. At the time of the IPO this week, that stake — held in a family trust called MTB Illiquid — amounted to 1.4 percent, according to the prospectus, though individual family members hold some additional shares. MTB sold about $18 million worth of shares in the IPO and still holds a stake worth $93 million.

Mick said his dad was “very loyal” to the brand and remembers him wearing Levi’s clothes all the time, though he said family members had to buy merchandise just like anyone else.

“It was definitely a labor of love for Warren,” said Mick, in describing Warren’s time as an investor and his 23 years as a board member. “He was a guy who never gave up on stuff, which was a wonderful attribute. if he was alive today he would still be working on it.”

Hellman was a pioneer in the private equity market, and had significant wins throughout his career. In 2005, his firm helped take DoubleClick private in a $1.1 billion purchase, before selling the advertising-technology company to Google two years later for $3.1 billion. Other big deals included an investment in the Nasdaq Stock Market, a recapitalization of Young and Rubicam, and a big stake in Formula One Holdings.

Hellman & Friedman has become an even bigger player in tech private equity of late, joining Blackstone earlier this year in the $11 billion buyout of Ultimate Software.

While Hellman made a name for himself in finance, he’s probably best known as a philanthropist and for Hardly Strictly Bluegrass, which kicked off in 2001 and has taken place every year since. He was also a banjo player and his band, The Wronglers, routinely performed at the festival.

His family has continued the event through the Hellman Foundation, which is involved in several projects and last year donated $20 million to the University of California at Berkeley for a faculty fellowship program that Hellman started.

The music tradition lives as well. Mick Hellman said that probably 70 to 80 percent of family members are in a band or two. Mick is in a band with his sisters called Marco and the Polos and another one with his daughter, Avery, covering Lucinda Williams songs.

Even when he was in business, an interview with Warren Hellman would invariably include lengthy discussions about music. He often had his banjo in his office alongside framed pictures of himself with any number of artists.

He would also talk about Levi’s. In an interview with Hellman in 2007, while I was working at Bloomberg News, I asked Hellman if he ever expected to get liquidity from the then 22-year-old investment or if it would all just remain on paper. He pondered the question for a few seconds.

“I don’t know,” he finally said. “I’d like to think so.”

WATCH: Expert: Levi’s IPO shows people are excited for companies to go public

Products You May Like

Articles You May Like

Existing home sales fall in August, and prices soften significantly
Everything parents need to know about student loan forgiveness
Are America’s Downtowns Coming Back?
Kim Kardashian Buys Cindy Crawford’s Former Malibu Oceanside Home For $70.4 Million
Magnificent Historic San Francisco Mansion Hits The Market For $12.9 Million

Leave a Reply