How Private Equity shaped Erik Prince (original THREAD on Twitter 5/2017)
By https://twitter.com/SaysDana
Leon David Black (born 1951) is an American businessman. Leon specializes in leveraged buyouts and private equity. He founded the Private Equity Firm Apollo Global Management in 1990. At the time of this writing, is estimated wealth was around $4.5 Billion dollars.
His father, E.M.Black, was an industrious man and after years of hard work, he had a company called AMK. AMK eventually merged with United Fruit Company, you know them, the Chiquita Brand banana? He would rename the company United Brands and soon discovered that United Fruit had far less capital than he had believed. The company soon became crippled with debt. The company’s losses were exacerbated and by 1974, by the hurricane which destroyed many of its banana plantations in Honduras. Black struggled to keep the company solvent, and in December United Brands announced that it was selling its interest in Foster Grant, Inc. for $70 million.
In 1975, the SEC uncovered a $1.25 Million bribe that United Brands had paid to Honduran President Oswaldo Lopez Arellano. Black had ordered it paid so he could obtain a reduction of taxes on banana exports. All of this caused the company to lose business and later that year, Arellano was ousted in a coup named “BananaGate”.
Sadly, around 8AM in February 1975, Eli Black went into his Manhattan office on the 44th Floor of the Pan Am Building, broke a window and jumped to his death.
After Black’s death, Seymour Milstein and Paul Milstein bought into United Fruit. But that’s another story that I will link to this. https://twitter.com/SaysDana/status/1003765956345122818
Leon Black was around 24 years old at the time of his father’s death and was completing his MBA at Harvard. Leon would eventually go on to work at the Investment Bank, Drexel Burnham Lambert, where one of his friends worked. His name was Michael Milken, famously known as the “Junk Bond King” due to the nature of his investments. Michael was later charged with securities fraud. https://en.wikipedia.org/wiki/Michael_Milken
Leon, you see, knows all the usual people and you really need to know everyone in the world of finance these days. His portfolio is diverse. He has friends around the world and close to his home as well. He supports great causes and loves the arts.
clockwise from top left, Jared Kushner, Leon Black, Karlie Kloss, Dasha Zhukova, Wendi Deng, David Geffen and Ivanka Trump
He also seems to like Military contracts. This is how he evolved into purchasing a company that was formerly known as Blackwater.
Enter Erik Prince
Erik Prince, brother of Betsy DeVos, founded Blackwater in 1997 and had tremendous contracts with the U.S. government during the Iraq war and other places in conflict. However, he changed the company name to XE Services, LLC around 2009, after a problem he had that involved a deadly shootout in 2007 that killed 14 people. Trials are still ongoing. https://www.nytimes.com/2014/10/23/us/blackwater-verdict.html
Around 2010, Erik Prince sold Xe Services to a company called Forte Capital Advisors and Manhattan Strategic Ventures, LLC, who began acquiring other companies, like Triple Canopy and The Olive Group
The new company was renamed ACADEMI which would later be part of sanctions and fines related to abuses in Sudan. https://www.reuters.com/article/us-usa-blackwater-fine-idUSBRE87701H20120808
By this time, they changed the name, again, to Constellis Holdings. To make sure they are all on the same page, one of the managing partners of Fore Capital was Jason DeYonker who co-managed the Prince family office. This, in my opinion, made sure that Prince always knew what was happening in Constellis Holdings at all times.
In 2014, Mr. Black, based on information from Reuters, had been very interested in investing in companies that serve the U.S. Government. Government contracts are worth big money, and it would seem reasonable that an Equity Firm would want to invest in a company in that sector.
By 2016, he was in talks to buy Constellis Holdings, LLC, formerly Blackwater, then XE Services, then ACADEMI, then Constellis Holding.
As a side note: the former U.S. Attorney General John Ashcroft and Red McCombs, the billionaire co-founder of radio station and advertising giant Clear Channel Communications Inc., are among Constellis’ Board of Directors.
They secured the deal in 2016.
By May 2017, Constellis Holdings acquired Centerra Group based in Reston VA and Palm Beach FL. They have more than 9,000+ employee worldwide, servicing Federal Contracts.
What’s scary is who they support around the world.
They have many hundreds of contracts with the U.S. Government. Many like this:
My point? Though private equity, with firms like Apollo, Blackstone and FMR to name a few, have managed to own a portion of companies worldwide that provide a service or a product that involves military operations. That’s how it works.
Whether it’s Potash investment (my THREAD here) https://twitter.com/SaysDana/status/892046515367063552 , mining https://twitter.com/SaysDana/status/892092855979618304 , construction https://twitter.com/SaysDana/status/1075858133895921664 , data analytics https://twitter.com/SaysDana/status/969617498633994240 , https://twitter.com/SaysDana/status/978322319947874304 , or security and risk management. This is how guys like Leon Black, Robert Mercer, Steve Schwartzman, KOCH, Murdoch, Ross, Mnuchin, Chao, Rybolovlev, Abramovich, Putin, Mack Ma, Trump and all the others do it. It’s the Billionaires Club.
It involves all the usual players and many we are just now learning. It involves, China, Iran, Russia, Turkey, Israel, Malaysia, Singapore, Mexico and South America.
That’s how they work their way into our banking and infrastructures. They begin with control of companies and services, while earning great return on investments for their investors. It’s all legal…………. until it isn’t.
Leon Black learned a lot through his mentor, Michael Milken who, along with his father before his death, had ties to Schwartzman, Mnuchin and Trump. He learned well, didn’t he?
2019 UPDATE: Apollo works to purchase Arconic, which was part of Alcoa, but carved out. They are based in NYC and provided some of the cladding to the Grenfell Tower. Of course, Apollo and others won’t be responsible for anything related the fire or the deaths, but probably got a great deal on the company.
https://twitter.com/AmberMining/status/1081566187748839424
https://www.zacks.com/stock/news/345407/apollo-global-might-announce-arconic-buyout-by-midjanuary
