Richard Baker Bought A Billion Dollar Company...

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Why it worked

The video tells a compelling story of a high-stakes business deal achieved through clever financial structuring rather than sheer capital. The narrative of overcoming odds and securing a massive acquisition with minimal personal investment is inherently engaging and aspirational.

Summary

The speaker recounts how he acquired Lord and Taylor for $1.2 billion without having the full amount upfront. He explains that he formed a single-purpose entity, NRDC Equity Partners Fund 7, and secured financing from Bear Stearns, Lehman Brothers, and CIT, contributing only $25 million of his own money.

Structure

1Transition from developing shopping centers to acquiring Lord and Taylor.
2Macy's merger led to the sale of Lord and Taylor.
3Speaker's interest in the real estate, not the business itself.
4Negotiating the deal with a special purpose entity.
5Securing financing from major firms despite lacking personal capital.
6Successfully acquiring Lord and Taylor with minimal personal investment.

Product placement

Lord and Taylor is mentioned as the company being acquired. Images of Lord and Taylor stores and logos are shown. The acquisition price of $1.2 billion is repeatedly emphasized.

On-screen text

Richard Baker Bought A Billion Dollar Company... THE MOST GAME CHANGING MOMENT FOR ME Without Having The Money? WAS WHEN I WENT FROM DEVELOPING SHOPPING CENTERS TO BUYING LORD AND TAYLOR THE DEPARTMENT STORE CHAIN SO MACY'S HAD MERGED WITH "THE MAY" COMPANY THEY OWNED LORD AND TAYLOR THEY DIDN'T WANT TO OWN LORD AND TAYLOR THEY WANTED TO SELL IT I WANTED TO BUY IT FOR ITS REAL ESTATE MACY'S WANTED TO SELL IT AND THEY WANTED TO SELL IT FOR $1.2 BILLION DOLLARS THEY DIDN'T WANT ANYONE ELSE THEY DIDN'T WANT TO TAKE ANYTHING LESS AND I MADE A DEAL EVEN THOUGH I WASN'T A LOGICAL I WASN'T A PRIVATE EQUITY GUY I WENT IN AND I NEGOTIATED A DEAL WITH THEM TO BUY UH LORD AND TAYLOR FOR $1.2 BILLION SO NOW ME MY REAL ESTATE ATTORNEY WE'RE NEGOTIATING WITH FEDERATED THIS MANY BILLION DOLLAR COMPANY AND UM BILLION DOLLAR COMPA WE'RE TURNING PAPERS NEGOTIATING EVERY DAY AND MY FATHER STARTS CALLING ME EVERY DAY LIKE WHAT ARE YOU DOING WE DON'T BUY 1.2 BILLION DOLLAR COMPANIES THEY'RE GONNA ASK FOR A DEPOSIT deposit THEY'RE NOT GONNA SELL YOU A 1.2 BILLION GOOD DOLLAR COMPANY THAT WAY I SAID RELAX I HAVE MY ENTITY NRDC EQUITY PARTNERS FUND 7 WHICH WAS A SINGLE PURPOSE ENTITY AT MIDNIGHT I CALLED MY FATHER FROM TIMES SQUARE CAUSE THE LAWYER'S OFFICE WAS IN TIMES SQUARE AND I SAY TO HIM THEY SIGNED THE PURCHASE AGREEMENT AND SO ALL THE CONSULTANTS ALL THE BEST LAWYERS IN THE WORLD FOR MY SINGLE PURPOSE ENTITY AND THEY JUST KIND OF ASSUMED THAT WE WERE SOME FUND SO YOU CREATED AN LLC OR LIKE SOME LLC YEAH LIKE AN LLC LIKE EVERY TIME EVERY DEAL WE DO I HAVE 200 LLC AND YOU 200 LLCS JUST CREATED A RANDOM ONE AND I PUT A NAME ON IT NRDC WHICH WAS THE NAME OF OUR PRIVATE EQUITY FIRM NRDC PRIVATE FIRM EQUITY PARTNERS FUND 7 FUND 7 THERE WERE NO 1 THROUGH 6 I JUST BY THE WAY THAT'S I TELL PEOPLE ALL THE TIME "HAVE A LANDING PAGE TAKE YOUR BASEBALL HAT OFF WEAR A JACKET IN THE A WHITE SHIRT YOU KNOW LOOK THE PART" SO I LOOK THE PART AND THEY ENTERED PURCHASE AGREEMENT INTO A PURCHASE AGREEMENT WITH ME SO NOW MY FATHER SAYS WELL THAT'S GREAT BUT WHERE YOU GONNA COME UP WITH THE $1.2 BILLION $1.2 BILL I SAID I'LL WORK ON THAT TOMORROW SO I WENT TO THESE THREE NICE INSTITUTIONS BEAR STEARNS LEHMAN BROTHERS CIT AND THE THREE OF THESE FIRMS LENT ME $1.175 BILLION $1 Billion 175 Million TO BUY LORD AND TAYLOR MY FAMILY REAL ESTATE BUSINESS WE DON'T PUT MONEY INTO DEALS SMART ! IF YOU'RE NOT SMART ENOUGH TO FIGURE OUT HOW TO DO IT WITHOUT ANY MONEY OR ALMOST NO MONEY THEN IT'S NOT OUR DEAL SO DEAL FOR THEM FOR MY FAMILY MY GANG TO PUT UP 25 MILLION WAS A HARD SELL BUT TO CONTROL A 1.2 BILLION DOLLAR COMPANY 100% FOR $25 MILLION AGREE EVERYONE AGREED MY FATHER WAS A LITTLE GRUMPY BUT WE ALL PUT IT IN AND NOW WE OWNED LORD AND TAYLOR

Original caption

Richard Baker explains how he got into a billion-dollar retail real estate deal without being a private equity guy — and why deal structure mattered more than having all the money upfront. #RichardBaker #RealEstateInvesting #BusinessDeals #FinanceTok

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Transcript

THE MOST GAME CHANGING MOMENT FOR ME WAS WHEN I WENT FROM DEVELOPING SHOPPING CENTERS TO BUYING LORD AND TAYLOR THE DEPARTMENT STORE CHAIN SO MACY'S HAD MERGED WITH "THE MAY" COMPANY THEY OWNED LORD AND TAYLOR THEY DIDN'T WANT TO OWN LORD AND TAYLOR THEY WANTED TO SELL IT I WANTED TO BUY IT FOR ITS REAL ESTATE MACY'S WANTED TO SELL IT AND THEY WANTED TO SELL IT FOR $1.2 BILLION DOLLARS THEY DIDN'T WANT ANYONE ELSE THEY DIDN'T WANT TO TAKE ANYTHING LESS AND I MADE A DEAL EVEN THOUGH I WASN'T A LOGICAL I WASN'T A PRIVATE EQUITY GUY I WENT IN AND I NEGOTIATED A DEAL WITH THEM TO BUY UH LORD AND TAYLOR FOR $1.2 BILLION SO NOW ME MY REAL ESTATE ATTORNEY WE'RE NEGOTIATING WITH FEDERATED THIS MANY BILLION DOLLAR COMPANY AND UM WE'RE TURNING PAPERS NEGOTIATING EVERY DAY AND MY FATHER STARTS CALLING ME EVERY DAY LIKE WHAT ARE YOU DOING WE DON'T BUY 1.2 BILLION DOLLAR COMPANIES THEY'RE GONNA ASK FOR A DEPOSIT THEY'RE NOT GONNA SELL YOU A 1.2 BILLION GOOD DOLLAR COMPANY THAT WAY I SAID RELAX I HAVE MY ENTITY NRDC EQUITY PARTNERS FUND 7 WHICH WAS A SINGLE PURPOSE ENTITY AT MIDNIGHT I CALLED MY FATHER FROM TIMES SQUARE CAUSE THE LAWYER'S OFFICE WAS IN TIMES SQUARE AND I SAY TO HIM THEY SIGNED THE PURCHASE AGREEMENT AND SO ALL THE CONSULTANTS ALL THE BEST LAWYERS IN THE WORLD AND NO ONE HAD ASKED TO SEE THE FINANCIALS FOR MY SINGLE PURPOSE ENTITY AND THEY JUST KIND OF ASSUMED THAT WE WERE SOME FUND SO YOU CREATED AN LLC OR LIKE SOME YEAH LIKE AN LLC LIKE EVERY TIME EVERY DEAL WE DO I HAVE 200 LLC AND YOU JUST CREATED A RANDOM ONE AND I PUT A NAME ON IT NRDC WHICH WAS THE NAME OF OUR PRIVATE EQUITY FIRM NRDC EQUITY PARTNERS FUND 7 THERE WERE NO 1 THROUGH 6 I JUST BY THE WAY THAT'S I TELL PEOPLE ALL THE TIME "HAVE A LANDING PAGE TAKE YOUR BASEBALL HAT OFF WEAR A JACKET IN THE A WHITE SHIRT YOU KNOW LOOK THE PART" SO I LOOK THE PART AND THEY ENTERED INTO A PURCHASE AGREEMENT WITH ME SO NOW MY FATHER SAYS WELL THAT'S GREAT BUT WHERE YOU GONNA COME UP WITH THE $1.2 BILLION I SAID I'LL WORK ON THAT TOMORROW SO I WENT TO THESE THREE NICE INSTITUTIONS BEAR STEARNS LEHMAN BROTHERS AND CIT AND THE THREE OF THESE FIRMS LENT ME $1.175 BILLION $1 BILLION 175 MILLION TO BUY LORD AND TAYLOR MY FAMILY REAL ESTATE BUSINESS WE DON'T PUT MONEY INTO DEALS IF YOU'RE NOT SMART ENOUGH TO FIGURE OUT HOW TO DO IT WITHOUT ANY MONEY OR ALMOST NO MONEY THEN IT'S NOT OUR DEAL SO FOR THEM FOR MY FAMILY MY GANG TO PUT UP 25 MILLION WAS A HARD SELL BUT TO CONTROL A 1.2 BILLION DOLLAR COMPANY 100% FOR $25 MILLION EVERYONE AGREED MY FATHER WAS A LITTLE GRUMPY BUT WE ALL PUT IT IN AND NOW WE OWNED LORD AND TAYLOR