In September 2011 Leonard Green & Partners LP and CVC Capital Partners took BJ’s private in a deal worth $2.8 billion. Since then, BJ’s PE investors have paid themselves dividends totaling at least $1.8 billion. To buy the company, the PE investors put a mere $630 million worth of their equity into BJ’s supplemented by BJ’s cash and $2.1 billion worth of debt. For example, in 2011, the PE investors arranged for BJ’s to borrow money to pay themselves a $650 million dividend. Due to all the debt BJ’s took on to finance this dividend, Moody’s cut BJ’s debt rating by six-notches.

Source: Forbes May 21, 2018 12:56 UTC