5. HCA (HCA)
One of the largest buyouts at the time, HCA was taken private by Bain Capital and KKR (KKR) in 2006 for a total value of $33 billion. The move was the hospital chain's second takeover after a $5.1 billion management buyout in 1988. The 2006 deal was heavily financed by lenders like Bank of America (BAC), Citigroup (C) and Merrill Lynch , who helped raise $23 billion in takeover debt.After struggling through the credit crunch, Bain and KKR returned HCA to stock markets in a $3.78 billion March 2011 IPO, the biggest U.S. private equity share offering ever. Prior to the IPO, Bain and KKR pulled a May 2010 offering to wait for markets to recover, choosing to use a $2 billion November debt offering to pay their investors a dividend. When HCA's offering hit markets at a price of $30 a share, Bain, KKR and Bank of America saw their initial $5 billion equity investment nearly triple as they sold roughly $1 billion worth of shares, to complement $4 billion-plus in dividends they'd pulled from the company and a remaining share stake worth over $11 billion. Stock investors haven't fared so grandly. Since its offering, HCA shares are off nearly 20% to $24.67 as of Tuesday's close, even as the company reported that its revenue grew to $32 billion and profits doubled to $2.5 billion in 2011. Overall, HCA is expected to earn $34 billion in 2012 revenue and $1.56 billion in profit, according to analysts polled by Bloomberg who give shares an average price target of $31.68. Seventeen analysts rate HCA shares a "buy," while eight rate the company a "hold." If the company were to see its leverage drop from present levels, it could seek to use its cash for growth acquisitions, share repurchases or special dividends, notes Bank of America Merrill Lynch analyst Kevin Fischbeck in a Mar. 1 note. Bain Capital holds over 89 million shares or 20.5% of the company's float, according to Bloomberg compilations of Securities and Exchange Commission filings. KKR holds a 87.5 million-plus share stake representing 20% of HCA's shares. In September 2011, Bank of America sold 80.2 million of its shares to HCA, in a repurchase move worth $1.2 billion. Meanwhile, roughly six years after their initial investment, Bain Capital and KKR are likely closing in on an exit strategy as the company's shares are expected to remain at its IPO price in coming quarters.
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