By Greg Roumeliotis
NEW YORK, April 26 (Reuters) – Joe Rice, a founder of
private equity firm Clayton, Dubilier & Rice LLC and an early
practitioner of the leveraged buyouts that transformed finance,
is stepping down after 34 years at the company, according to a
letter sent to investors.
Rice, a Harvard Law School graduate and a former lieutenant
in the United States Marine Corps, will step down as chairman of
CD&R; in June, the firm’s chief executive Donald Gogel told
investors in the letter dated April 25 and obtained by Reuters.
A pioneer of the private equity industry, Rice, 80, made his
name by spotting untapped potential and turning companies
around. He gained wide recognition in 1991 when he bought IBM
Corp’s printer division and transformed it into a global
inkjet manufacturer, reaping 4.3 times his firm’s $200 million
investment.
CD&R; went on to be part of some of the major private equity
deals in the U.S. and Europe, including the $15 billion takeover
of car rental firm Hertz Corporation from Ford Motor Co
and the $3 billion acquisition of Sally Beauty Holdings, a
retailer and distributor of professional beauty supplies.
Rice got a degree from Williams College in 1954 and served
in the Marines until 1957. In 1960 he graduated from Harvard
Law and worked at Sullivan & Cromwell LLP until 1966, when he
joined Laird Incorporated, an investment banking firm.
Rice founded CD&R; in 1978 along with Martin Dubilier and
Eugene Clayton. Clayton left the firm in 1985, and Dubilier died
of lung cancer in 1991.
Rice is now expected to spend more time with the Private
Capital Research Institute, an industry think tank which he
co-founded. His departure may put added pressure on the firm to
outline plans to find an eventual successor for 63-year-old
Gogel.
With $13 billion in assets under management, CD&R; has chosen
not to follow some of its peers such as Blackstone Group LP
and Carlyle Group LP, that have grown by investing in
alternative assets beyond buyouts.
Still, its senior advisers include big names such as former
General Electric Co chief executive Jack Welch, former
Procter & Gamble chief executive Alan Lafley and former
Tesco Plc chief executive Sir Terry Leahy.
The New York Times reported on Rice’s departure earlier on
Thursday.
