NEW YORK (CNN) – Thomas H. Lee, a private equity financier who pioneered the use of leveraged buyouts to help transform America’s businesses, according to a release from his former firm, which still bears his name, died.
“We are deeply saddened by the unexpected passing of our good friend and former partner Thomas H. Lee,” THL said in a statement. “Tom was an icon in private equity. He helped advance an industry and mentored generations of young professionals to follow in his footsteps.”
A senior law enforcement official told CNN a preliminary analysis suggested Lee, 78, died Thursday at his Fifth Avenue office from a self-inflicted gunshot wound. However, officials are waiting for the coroner to determine the cause of death.
Lee was one of the leading providers of leveraged buyouts, or LBOs. In LBOs, a buyer borrows money to make a purchase, typically using future earnings from the acquired business to repay the loan. The goal is often to sell the company at a higher price in a relatively short period of time, either to another buyer or through an IPO.
One of Lee’s most famous and lucrative leveraged buyouts was the purchase of Snapple for $135 million in 1992. Lee sold it to a competitor, Quaker Oats, in 1994 for $1.7 billion. Quaker Oats sold Snapple shortly thereafter for just $300 million, a massive loss.
Unlike many private equity firms, Lee’s firm was not known for making massive cost cuts such as: B. Extensive staff layoffs to increase the value of the acquired business and increase its value prior to a sale. He was able to increase the value of Snapple prior to his sale to Quaker Oats primarily through growing the company and its sales, reportedly growing sales from $95 million a year to $750 million a year.
“He’s the rare thing on Wall Street — a really nice guy,” Forbes said of him in a 1997 profile.
Lee left THL in 2006 and founded another private equity firm, Lee Equity Partners. His bio on the company’s website states that he has invested $15 billion in capital in hundreds of transactions over the past 46 years.
Lee began his career as an analyst in the institutional research division of LF Rothschild & Company. He then moved to First National Bank of Boston, where he rose to vice president and headed the bank’s high-tech lending group. In 1974 he founded Thomas H. Lee Partners.
Forbes estimated his fortune at $2 billion at the time of his death.
He was also active in philanthropy. According to his firm’s biography, he is or has been a trustee of the Lincoln Center for the Performing Arts, the Museum of Modern Art, NYU Langone Medical Center, and the Whitney Museum of American Art, among others.
“The family is deeply saddened by Tom’s passing,” family friend and spokesman Michael Sitrick said in a statement. “While the world knew him as one of the pioneers in the private equity business and a successful businessman, we knew him as a devoted husband, father, grandfather, sibling, friend and philanthropist who always put the needs of others ahead of his own. Our hearts are broken.”
Editor’s note: If you are in the United States and you or a loved one have considered suicide, call the National Suicide and Crisis Lifeline at 988 or 1-800-273-TALK (8255) to connect with a trained counselor set. Outside the US, the International Association for Suicide Prevention provides a worldwide directory of resources and international hotlines, and you can contact Befrienders Worldwide.