Blackstone Inc.

Blackstone Group L.P. is a prominent private equity and investment management firm founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman. The company is based in New York City, in River House on Park Avenue at Fifty-first Street, with offices in Atlanta, Boston, London, Hamburg, Paris, Mumbai, and Hong Kong. One of the world's largest private equity firms,[1] it is part of the migration of companies from public to private hands — a total of some $370 billion in deals in the U.S. in 2006.

It is not to be confused with the investment management firm BlackRock, Inc., which was founded by Blackstone, but sold in 1995. Blackstone is a wordplay on the founders' names. Schwarz is German for black and Peter, recurrent both in the name and surname of one of the founders, stands for stone, thus yielding the company's name: Blackstone. (Peterson is a Greek-American and his name Peter, or "Petros" in Greek, means stone or rock.)

Business divisions

Private Equity Group (manages holdings in Allied Waste, Graham Packaging, Celanese, Nalco, Houghton Mifflin, American Axle, Prime Hospitality, and Universal Studios Florida).
Real Estate Group (holds more than 13 million square feet of real estate in Boston, New York, San Francisco, and Washington, DC.)
Corporate Debt Group
Marketable Alternative Investments (Blackstone Alternative Asset Management, or BAAM), which offers numerous funds of hedge funds, first used only by internal investments, now open to clients.
Private Placements (Park Hill Group, or PHG), Raising capital for Hedge Funds, Private Equity, and Real Estate funds
Relative Value Fixed Income Investments
Corporate Advisory Services
Restructuring & Reorganization Advisory (clients have included XEROX, Enron, Bally Total Fitness, and Global Crossing).

Recent Activity

In recent years Blackstone has made significant investments in the hotel and commercial real estate industries by buying and taking private seven large publicly-traded firms:

In May, 2007, the government of the People's Republic of China agreed to buy $3 billion non-voting stock in Blackstone, which is a 10% stake. As a result Blackstone has increased it IPO to $7.8 billion worth of stock, this includes the China stake.

In May, 2007, Blackstone agreed to purchase Alliance Data for $7.8 billion.

In April, 2007, Blackstone agreed to sell Extended Stay Hotels, based in Spartanburg, SC and its brands to The Lightstone Group for USD 8 billion. The sale is expected to close in June, 2007 and will be the largest hotel deal in history.

In March, 2007, Blackstone filed for $4 billion Initial Public Offering, preparing to change its nature from a private firm to a public firm. ^[1]

In March, 2007 Blackstone purchased The Tussauds Group, for £1 billion from Dubai International Capital.^[2]

In December, 2006, Blackstone as part of a Consortium of private equity funds including Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG, agreed to purchase all stock shares of Biomet for approximately $10.9 billion. Biomet is a worldwide manufacturer and marketer of hip, knee, shoulder, and spinal implants and supporting surgical supplies for the orthopedic industry.

In November, 2006, Blackstone agreed through its affiliate, Blackstone Real Estate Partners, to acquire billionaire Sam Zell's Equity Office Properties Trust, for approximately $39 billion. Goldman Sachs, Bank of America, Morgan Stanley and a few others acted as financial advisors to Blackstone in the deal. Prior to the takeover Equity Office was the nation’s largest publicly held office building owner and manager. Its total office portfolio consisted of whole or partial interests in 580 buildings comprising 108.6 million square feet in 16 states and the District of Columbia. The acquisition was the biggest takeover of a real estate company and the largest private equity deal in history.[2]

In September, 2006, Blackstone lead a consortium buyout of Freescale Semiconductor. The other members of the consortium were the Carlyle Group, Permira Funds and the Texas Pacific Group. [3]

In July, 2006, Blackstone Capital Partners agreed to purchase Encore Medical for $870 million in cash. Encore makes spine, knee, hip and shoulder implants for the orthopedic industry.

In June, 2006, Blackstone entered into a definitive agreement with Cendant Corp to acquire Travelport, its travel distribution services business for about $4.3B in cash. Travelport includes the Orbitz travel reservation website used by consumers, the Galileo computer reservations system used by airlines and thousands of travel agents, Gulliver’s wholesale travel business, and numerous other travel related software brands and solutions.

Also in June, 2006, Blackstone teamed up with Canadian property firm Brookfield Properties to acquire US office REIT Trizec Properties. Blackstone and Brookfield valued Trizec at $8.9B

Since April, 2006, Blackstone is a major shareholder (4.5 %) of Germany's Deutsche Telekom.

In March, 2006, Blackstone announced it intended to acquire CarrAmerica Realty Trust for $5.6B. CarrAmerica owns stakes in 285 upscale office properties throughout the US.

In February, 2006, Blackstone announced it would purchase Meristar Hospitality Corporation and its 57 hotel assets for $2.6B. Meristar's additional 10 Florida resorts (which Blackstone announced it would acquire separately several weeks before buying the entire company) were relaunched as members of the LXR brand.

In January, 2006, Blackstone closed on its $3.4B previously announced acquisition of La Quinta Corporation, an owner, manager, and franchisor of limited service hotels under the La Quinta Inns, La Quinta Inn & Suites, and Baymont Inn brands. In March, 2006 Blackstone announced it would sell the Baymont Inn brand to the Cendant Hotel Group and re-brand Baymont's existing hotels as La Quintas.

In June, 2005, Blackstone acquired Wyndham International for $3.2B. The Wyndham brand and management business was sold to Cendant Corp and 14 full-service Wyndham hotels located primarily in urban locations were sold to Columbia Sussex, a private hotel ownership and management business based outside Cincinnati. The 21 hotels that remained consisted of Wyndham's prized resort assets and included such properties as El Conquistador Resort & Spa in Puerto Rico, The Reach Resort in Key West, FL, and Carmel Valley Ranch in Carmel, CA. These assets were converted to the LXR brand. Summerfield Suites, Wyndham's extended stay offering was sold to Global Hyatt and renamed Hyatt Summerfield Suites.

In October, 2004, Boca Resorts, Inc. agreed to be sold to Blackstone for $1.25B. Boca Resorts owned and operated five resort properties in Florida that were all transitioned to the LXR Luxury Resorts brand.

In August, 2004, Blackstone paid $800M to acquire Prime Hospitality. Prime's AmeriSuites brand was quickly sold to Global Hyatt and has since been reborn as Hyatt Place. Thirty-seven Wellesley Inns were converted to the Extended StayAmerica brand and the Prime Hotel Saratoga Springs was renamed The Saratoga and joined the LXR Luxury Resorts brand.

In March, 2004, its major affiliate, Blackstone Real Estate Partners, paid $1.9B to acquire Extended StayAmerica (ESA). ESA has since been combined with Blackstone's previously-owned Homestead Village brand and rechristened Extended Stay Hotels.