NEW YORK — The current corporate buyout boom is leaving its mark on California, and one name that seems to be popping up all over the state is Blackstone Group.
Last July, the Manhattan-based investment firm bought Legoland in Carlsbad and three other Lego Group theme parks for $457 million. It is advising the Albertsons supermarket chain on an auction to sell the company, a deal that is roiling the Southern California grocery industry and has caught the attention of the Los Angeles City Council.
In December, Blackstone joined a group that is trying to buy San Jose-based Knight Ridder Inc., the nation's second-largest newspaper chain. It's familiar territory for the firm. In 2003, Blackstone bought a piece of Freedom Communications Inc., owner of the Orange County Register.
And just last week, the firm was reported to be mulling over a joint offer with Silicon Valley icon Hewlett-Packard Co. for El Segundo-based Computer Sciences Corp.
For years, so-called private equity firms like Blackstone were the U-boats of the financial world, managing secretive, lightly regulated investment funds that mostly kept out of public view, and surfacing abruptly now and then to buy a company, often in an out-of-favor industry.
But lately, the stealth has gone out of the game. With more than $100 billion of private equity money on the prowl, deals are coming fast and big, involving such familiar brands as Hertz, Lego and Dunkin' Donuts.
"The world is awash" in cash looking for profitable investments, said David J. Brophy, a University of Michigan finance professor who studies venture capital and private equity.
Among the flurry of transactions was Blackstone's teaming with four other firms in November to buy TDC, Denmark's biggest telecom company, in a $15.6-billion leveraged buyout surpassed only by 1988's spectacular RJR Nabisco deal.
Leveraged buyouts -- known as LBOs -- are a favored vehicle for Blackstone and other private equity firms, which deploy funds invested by institutions and wealthy individuals looking for market-beating investment returns.
In an LBO, the buyer puts up a third or less of the purchase price in cash and finances the rest of the deal with loans. The hope is that after being restructured, the acquired company will generate enough cash flow to cover the debt payments as well as pay dividends to the equity investors.
