Forstmann Little
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| Private ownership | |
| Industry | Private equity |
| Founded | 1978 |
| Founder | Ted and Nick Forstmann and Brian Little |
| Defunct | 2015 |
| Headquarters | New York, New York, United States |
| Products | Leveraged buyout, Growth capital |
Forstmann, Little & Company was a private equity firm, specializing in leveraged buyouts (LBOs). At its peak in the late 1990s, Forstmann Little was among the largest private equity firms globally. Ultimately, the firm would suffer from the bursting of the internet and telecom bubbles, having invested heavily in technology and telecommunications companies. The firm closed in 2015.
Ted Forstmann was a golfing partner of Derald Ruttenberg at the Deepdale Country Club on Long Island. He arranged for Ruttenberg to meet Henry Kravis and Jerry Kohlberg of the start-up Kohlberg Kravis Roberts. Kravis and Kohlberg proposed what they called a leveraged buyout. After the two had left, Ruttenberg suggested that Forstmann could do the same himself. Ruttenberg arranged funding for Forstmann, who launched Forstmann Little & Company in 1978. The company was founded by brothers Ted and Nick Forstmann, and Brian Little. With the deaths of Brian Little and Nicholas Forstmann in 2000 and 2001, respectively, Ted Forstmann was the chief partner. A third brother, J. Anthony Forstmann, is a limited partner in the firm.
Since its inception in 1978, the firm made more than 30 acquisitions and significant investments returning over $14 billion in profit for its investors.
Successful acquisitions include Gulfstream Aerospace, Topps Playing Cards, Dr Pepper, Stanadyne, and General Instrument. The company has usually been successful in making a profit on such purchases, selling Gulfstream to General Dynamics, and General Instrument to Motorola. In the case of Gulfstream, Ted Forstmann took direct control of the financially ailing company's day-to-day operations to improve the company's attractiveness to a potential acquirer.
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Wikipedia