4 good things Bain Capital did on Mitt Romney's watch
Democrats say the GOP presidential hopeful plundered companies and destroyed jobs. But what about Romney's private-equity successes?
President Obama's re-election campaign has been aggressively casting GOP rival Mitt Romney as a job-killing corporate raider during his years running private investment firm Bain Capital. John Sununu, a former governor of New Hampshire and prominent Romney surrogate, acknowledges that Bain is fair game, but also accuses Team Obama of distorting Romney's record there by "cherry-picking" the company's failed investments and ignoring its successes. Here, four such successes, from Bain's founding in 1984 until Romney left in 1999:
1. Romney helped Staples get its startBefore Staples opened its first office-supply store, the company's founder, Thomas G. Stemberg, went to Bain for help, says Ronald Kessler at Newsmax. Stemberg told Romney that companies were spending more on office supplies than they thought. Romney had his associates do a survey of office managers, then checked the figures against invoices, and found that Stemberg was right. "Romney agreed to put $600,000 of Bain Capital money into the new venture," and within a few years, he had made back eight times his money while contributing to the launch of a successful national company.
2. Bain played a role in Sports Authority's successRomney and Co. were "among a handful of venture-capital firms that helped found the Sports Authority" by forking over much-needed cash in exchange for a minority stake, says The Washington Post. At the time, Sports Authority had fewer than 10 stores, and was hungry for money to fuel its expansion. By the time Romney left Bain, Sports Authority had exploded, and employed nearly 14,000 people across the country.
3. Bain backed a startup that became a steel giantRomney's critics have focused on Bain's investment in a now-defunct steel firm, GS Technologies, as "the worst kind of private-equity investment," says Patrick Brennan at National Review. But Bain's "more successful involvement" in another steel company, Steel Dynamics, has gone largely overlooked. The steel industry was "hardly a hot startup market" in 1994, but Bain saw potential in the company's "mini-mill" as a way to lower costs. Bain invested $18 million, giving others confidence to invest and helping the company reach the $80 million in seed money it needed to get going. Bain sold its stake in 1999 for $104 million, and Steel Dynamics (SDI) has since grown to become the fifth-largest U.S. producer of carbon-steel products.4. Bain itself is a successRomney should be eager to talk about Bain, says Ford O'Connell at U.S. News & World Report, and not just because of the firm's 80 percent success rate in driving up revenue at the companies it acquires. Romney should be most proud of "his own success in building Bain Capital from scratch into a successful organization with a great reputation that met a significant payroll and provided a service on which the economy absolutely depends." Over 28 years, the firm has boosted income at the companies it backed by $105 billion, creating thousands upon thousands of jobs. To attack Bain, you have to attack all of private equity, says Chris Stirewalt at Fox News. "Romney and Bain were widely seen as very good at what they did, not plunderers, but responsible corporate citizens."