Pritzkers cash out in unusually amicable fashion
By Rolfe Winkler
The Pritzkers appear to be cashing out in unusually amicable fashion. The sale of a majority stake in credit reporting firm TransUnion is the latest step by the Chicago clan to unwind its $15 billion empire. Earlier squabbles over the spoils looked ominous for the plan. But it seems to have gone relatively well compared to the trouble many rich families face.
American dynasties tend to resemble, well, “Dynasty”. Selling off the family silver often gets nasty, or at best clumsy. The Koch brothers fought a bitter battle for ownership of the family oil services business. Campbell Soup’s Dorrances watched their franchise deteriorate, and then wrangled over whether to exit. In 2007, the Bancrofts tripped all over themselves when it came to selling Dow Jones to Rupert Murdoch’s News Corp.
The Pritzkers have had their soap opera moments too. Cousins Liesel and Matthew Pritzker accused their father and 11 older cousins in 2002 of looting their trust funds. The lawsuits resulted in $450 million settlements for the youngsters, no small hiccup in the proceedings. But since that 2005 resolution, the rest of the family has moved along smoothly to execute its agreement to divide the fortune by 2011.
The results have been fruitful. In 2006, smokeless tobacco company Conwood went to Reynolds American for $3.5 billion, or a healthy enterprise value of 13 times EBITDA. Then, Warren Buffett shelled out $4.5 billion for 60 percent of Marmon Holdings, giving the Pritzkers nine times operating income for their industrial conglomerate. Most recently, the Pritzkers floated a quarter of Hyatt Hotels for $950 million, a price that translated to 13 times earnings despite the family retaining control.
The TransUnion deal appears to follow this solid trend. The sale of 51 percent to private equity firm Madison Dearborn Partners values the company at north of $2 billion, according to sources cited by the Wall Street Journal. That’s in line with rivals Experian and Equifax.
Younger generations often struggle with their corporate inheritances. But heirs elsewhere would do well to stop watching the growing number of their wealthy peers turning up on reality TV and pay closer attention to how the Pritzkers have moved past the drama.