Bain Capital has had better weeks.
The Boston private equity firm was a lead investor in three leveraged buyouts — Toys ‘R’ Us, iHeartMedia and Guitar Center — each of which experienced a financial collapse in recent days.
The Mitt Romney-founded firm co-led the 2008 buyout of America’s biggest radio station owner, iHeart, and on Thursday the San Antonio, Texas, company filed for bankruptcy protection.
In 2005, Bain was a lead investor in Toys ‘R’ Us, which announced Thursday it was liquidating its 730 stores, putting 33,000 jobs at risk.
And the 34-year-old PE shop was also the lead investor in 2007 in Guitar Center, the musical instrument retailer that this week proposed a debt refinancing that, if accepted by bondholders, would be considered a default, credit agencies said.
Bain typically buys steady, healthy companies in highly leveraged buyouts.
“They take a lot more risks than other private equity firms,” Eileen Applebaum, co-director of the Center for Economic and Policy Research in Washington, DC, told The Post, referring to pushing the envelope on the amount of debt they put on their companies.
Twenty-two percent of Bain LBOs from 1984 to 1992 went bankrupt, Applebaum wrote in her book, “Private Equity at Work.” That is a far higher percentage than the industry average, according to the book. It happened under previous leadership.
Boston Celtics owner Stephen Pagliuca and Josh Bekenstein now lead Bain.
The $26 billion iHeart buyout seemed a stretch, even at the time.
Bain and Thomas H. Lee Partners first agreed to buy iHeart, then called Clear Channel, in 2007.
But as the deal was set to close, the Great Recession began.
Lenders financing the buyout — including Citigroup and Morgan Stanley — moved to terminate the deal.
Bain and THL took the lenders to court and forced the buyout to be completed.
The owners collected about $43 million each in transaction fees from their fund investors for completing the deal.
An iHeart creditor said he believes that iHeart will improve its operating earnings post-bankruptcy — by about 10 percent over the next two years — as the cash that was being used to pay down debt can now be used to invest in digital initiatives.
Of course, not every Bain LBO during the go-go 2006-2008 period is crashing.
The PE firm bought both Burlington Coat Factory and HCA Healthcare during that stretch — and both are performing well.
The Boston firm last year raised a $9.4 billion North American buyout fund so it will not need more money for at least a few years.
A Bain spokesman did not return calls.