Mitt Romney was born on March 12, 1947, in Ohio State, in the United States of America. He grew up in a modest family. Romney’s father was a businessperson who had an auto-body shop called the American Motors Corporation. Romney’s mother owned a small piece of land in Brazil. As a graduate, Romney ventured into several businesses with Bain Capital as his major business empire and acquired great expertise in business management and leadership. He played significant roles in the restructuring and revival of various businesses and organizations. In 1998, despite numerous suggestions that Romney could steer the troubled Salt Lake Organization Committee for the 2002 Olympic Games in the right direction, Romney dismissed the proposition because he had no experience in sports administration. Moreover, Romney was against the idea of leaving Massachusetts for Utah where he and his wife had invested their entire careers. Apart from his businesses, Romney was also involved in church and civic activities. In addition, Romney was interested in the Olympic Games. The Salt Lake Organization Committee (SLOC) had just lost their leadership because of a scandal. As a result, they established a team of prominent civic and business leaders in an effort to identify a replacement. That was when the name of Mitt Romney came up. The stakeholders concerned with the replacement efforts for the SLOC identified Romney as a competent and highly productive businessperson.
Rescuing Businesses and Organizations
In 1990, Mitt Romney rescued Bain & Co, a large business enterprise, when he came back as the interim CEO of the company. Bain & Co was on the brink of collapse due to excess debts. William Bain, who was the founder of the company, asked Mitt Romney to return to the company as an interim CEO to solve the financial crisis it was facing. Romney responded by introducing measures that would minimize expenses, renegotiate loans, and improve the morale of the company’s employees. Romney’s return to Bain & Co catapulted the company into great profitability and financial glory within one year of his tenure. He later returned to lead the Bain capital. Romney also played a key role in tackling the crisis at the Salt Lake Organization Committee (SLOC) in the 2002 Olympics Games. SLOC leaders approached Mitt Romney with the offer to take over the position of the SLOC’s CEO after the committee had found a shortfall of 397 million dollars attributed to a scandal by management of the committee. With Mitt Romney as the CEO of the SLOC, the Olympic Games had realized a surplus of 56 million dollars by the end of the games (Hewitt, 66). As a businessperson with extensive experience, Romney resolved the economic crisis of the federal government of Massachusetts in 2002 where he was the governor. As the new governor of Massachusetts, Mitt Romney consolidated all state agencies in Massachusetts. He redesigned the labour force and closed all loopholes in the corporate tax code. In addition, Mitt Romney successfully handled the complicated issue of health and insurance to enhance effective service delivery.
Mitt Romney and Bain Capital Company
After raising a startup capital of 37 million dollars, Mitt Romney founded the Bain Capital. This company is a sister firm to the main Bain & Co. The Bain Capital under the leadership of Mitt Romney successfully launched and acquired Dominions’ Pizza, Sealy, Brook Stone and the Sports Authority. Mitt Romney’s tenure as the CEO at the Bain capital company enabled the company to meet various objectives and now it manages assets worth over 40 billion dollars (Romney 12). During his tenure, Romney spearheaded the company to invest in more than one hundred companies. Some of these companies include the Staples Company, which comprises more than 89 thousand employees, the Sports Authority with over 15 thousand employees, Bright Horizons with nineteen thousand employees, and Steel Dynamics with over six thousand employees among other companies (Romney 4). More than 80 percent of the companies that the Bain Capital has invested in have posted satisfactory amounts of revenues in subsequent financial years. A company’s growth is important in creating employment. When a company expands, it has a higher capacity to hire more employees. Mitt Romney helps Bain Capital to pursue an investment strategy that targeted companies that were facing a management and financial crisis and attempted to support them to stabilize their operations. Bain Capital has supported these companies for many years and invests both financial and human resources to improve their operations. By doing so, Mitt Romney wanted to revive these companies and reverse the negative impacts associated with their poor performance and potential closure.
Beneficiaries of Mitt Romney in Private Equity
Investors in the fund are the main beneficiaries of Romney’s work as a CEO in private equity. These investors in the fund include pension funds, charities, and learning institutions. More than half of the money invested in private equity is from pension funds and charities. Under the leadership of Mitt Romney, the success of private equity investments has helped in providing secure retirements and allows charity organizations to serve communities (Romney 22). It also provides universities and other institutions of learning with resources that they require executing their roles effectively. Both the state and local governments rely on high returns from the private equity investment to fund employees’ retirements without reducing the operating budget (Romney 23).
Bain Capital and Apex Tools
Under the leadership of Mitt Romney, Bain Capital acquired Apex Tools, one of the leading manufacturers of power tools in the United States. Bain Capital bought Apex Tools Company for 1.6 billion dollars. Apex Tools is the second largest hardware dealer with Bain Capital. Apex Tools is a venture between Danaher and Cooper Industries. Apart from manufacturing power tools, Apex Tools also engages in the manufacture of drill chunks and soldering products. Danaher Company and Cooper Company own equal shares of Apex Tools. The Company has its base of operation in Parks and Maryland. However, the sale of Apex Tools Company to Bain Capital allowed the two companies, Cooper and Danaher, to shed off their noncore assets. At their joint venture in Apex Tools Company, Danaher and Cooper combined their business assets into a consolidated operating system. The relationship between Bain Capital and Apex Tools gave both Danaher and Cooper room for focusing on their core business plans (Vidmar 32). Bain Capital had been in the forefront of acquiring divisions that big groups in other companies disposed of. In 2010, Bain Capital paid 1.6 billion dollars to the Dow Chemical Company for the Styron basic plastic unit. Later, in 2010, the Bain Capital private equity group joined the Advent International in order to pay 2.7 billion dollars to the royal bank of Scotland.
In general, Mitt Romney has achieved a lot in business, especially with Bain Capital, a business empire that he started by raising 37 million dollars in 1984. Mitt Romney is also a good financial manager. He revived Moribund Companies to become a highly valued consultant for a storied Wall Street private equity firm. He used a unique way of making the financial fortune that he enjoys today. Being a risk taker, Mitt Romney started his businesses by using funds borrowed from various sources. An example is the 37 million dollars he borrowed to start Bain Capital. He is indeed one of the most successful businesspeople of all times. Apart from Bain capital, which evolved into what it is today from initial 37 million dollars in 1984, Romney’s book, Turnaround, was one of the bestsellers that helped him in creating the Staples office supply chain. Romney is well known for his ability to rescue failing business enterprises. By using Bain capital to help underperforming businesses, Mitt Romney created several job opportunities for the jobless and thus boosted the economy. During his career at Bain Capital, Mitt Romney implemented several strategic business decisions. One of these decisions was to move from creating companies like Staples through venture capital to a business model of borrowing huge amounts to take over the existing firms and then extract a value from them. Mitt Romney argued that there are many risks involved in starting a new firm than acquiring an existing company. In the 1980s, Romney made a move, which was similar to that of Gordon Gekko with Wall Street.
How Bain Capital Liberated Failing Companies
As a private equity firm, Bain Capital seeks out businesses with good cash flows. Bain then puts down a relatively small amount of money into the business enterprise of interest. It then collaborates with financial institutions to meet monetary demands. Bain Capital will then use the borrowed money to buy a controlling stake in the firm of interest with the company’s consent (Romney 150). This requires the firm’s consent, since it can result in a scandalous act called a hostile takeover. Mitt Romney and Bain Capital avoided the hostile takeover, which could ruin the company’s reputation. Romney preferred to secure a cooperative takeover with the targeted firm. He achieved this by giving the firm’s management good bonuses. After buying off these companies, he would make a huge amount of returns thereafter (Romney 151).