Not saying I'm voting for him (yet) but he's right up there.
By KEN HOOVER, INVESTOR'S BUSINESS DAILY Posted 01/13/2012 06:36 PM ET
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Since emerging as the Republican front-runner, Mitt Romney has been pilloried as a corporate raider and greedy destroyer of working-class jobs because he once headed private equity firm Bain Capital.
A new video by a political action committee with ties to rival presidential candidate Newt Gingrich portrays Romney as someone who plundered companies for their assets, left them in debt and ruined countless lives of ordinary Americans.
That's not the view at Fort Wayne, Ind.-based Steel Dynamics (STLD), where Bain invested just as the company was getting off the ground in 1994. Today, Steel Dynamics is the fifth-largest U.S. steel maker, employing 6,437 workers, according to Chairman and just-retired CEO Keith Busse.
Mitt Romney, pictured in Palm Beach, Fla., on Thursday, helped form Bain Capital in 1984.
Mitt Romney, pictured in Palm Beach, Fla., on Thursday, helped form Bain Capital in 1984. View Enlarged Image
That number includes about 4,000 new jobs, with the rest coming via acquisitions.
But it goes further than that, Busse says. For every steel worker directly employed, there are three or four jobs created by a network of suppliers. He estimates the total employment base as the result of Steel Dynamics' success at around 25,000.
"They were great to work with," Busse recalled of Bain. "They were good providers of financial knowledge. They put people into deals who were very savvy. They could tell you what to do and what not to do."
To this day, Bain managing director Paul Edgerley remains on Steel Dynamics' board, although Bain has long since sold its interest.
"We value Paul's advice," Busse said. "We've often asked ourselves what would we do if he left the board."
Steel Dynamics was founded by Busse and two other industry veterans in 1993 with plans for a plant in Butler, Ind. They were looking for venture capital to help them.
"It normally takes two years to make a steel plant profitable," Busse recalled. "We didn't have two years. We were running out of money."
GE Capital (GE) was interested, but CEO Jack Welch told Busse he didn't want to fund the whole thing because it would be the biggest gamble GE had ever taken on a startup.
Welch brought in Bain, which investigated the project. Busse said he met with Romney. Bain liked the deal and invested $18.3 million.
"Their general strategy is to exit early," Busse said. Bain later sold its stake for $104 million, according to a 2000 prospectus from Deutsche Bank.
The private equity firm should have held on longer. Steel Dynamics went public in November 1996, finishing its first month of trading with a split-adjusted price of 4.56 a share. The stock reached a peak of 40.92 in June 2008 for a gain of 797%.
