David Bonderman, the former chairman of Ryanair and co-founder of TPG private equity, passed away at 82, leaving behind a significant legacy in the financial world.
He played a pivotal role in transforming private equity firms into powerful entities, known for making bold investments and successful company takeovers.
Bonderman’s notable investments included early ventures in companies like Airbnb, Spotify, and Uber, showcasing his eye for high-potential startups.
Before his finance career, he gained recognition as a civil rights lawyer, influencing his approach to complex and unconventional deals during his tenure in private equity.
The man who made Ryanair
Bonderman’s role cannot be over-rstated in the salvation of Ryanair and freed it from the ghost of Tony Ryan’s failed 1992 flotation of Guinness Peat Aviation. He said “Because of GPA, the airline could not go public with Tony. As a result, the deal was that I would become chairman and would take the company public.”
It was Bonderman’s decision to list Ryanair on the Dublin and New York stock exchanges, not in London, officially commenting that the City of London lacked sufficient understanding of the low-cost, no-frills philosophy of the airline.
The Observer commented “Ryanair is right. London is clearly not prepared to take a leap of faith. What they really cannot get over, of course, is the fact that Ryanair is part-owned by Tony Ryan.”
Bonderman also leveraged his good working relationship with Morgan Stanley to have the bank underwrite the IPO, which in turn convinced the Investment Bank of Ireland to sign on.
Bonderman’s first contact in 1995 was a meeting with Declan Ryan at the end of 1995 to propose a 51pc takeover of the then privately owned Ryanair. It fell through, but in August 1996, a complex deal was signed with Bonderman, bringing in his colleagues Rick Schifter and Jeff Shaw. This agreement saw their Irish Air LP consortium take a 20pc holding in Ryanair. The sale valued the privately owned airline at £56m. The Ryan family retained 62% ownership and more than £50m in cash, while O’Leary had an 18pc holding.
At a board meeting in 1996, Tony Ryan was minuted saying “the timing was now appropriate for him to resign his position in light of the decision to proceed with the IPO.’
Bonderman initially got involved to negotiate a deal with Richard Branson to use the Virgin brand to expand into Europe. The deal collapsed, and Bonderman observed: “It was clear that the British thought the Irish were a bunch of hayseeds and the Irish thought the British were a bunch of snobs, so they were not going to get along together in any respect.”
Bonderman said he found it to be an interesting business model that was small and rapidly growing, which he believed was the right time to invest. Afterwards Tony Ryan called him up and said, “There’s a new game plan. Would you be interested in a minority investment?” Bonderman expressed his interest under certain circumstances.
Declan Ryan told Ryan’s biographer Richard Aldous that at the first Ryanair board meeting with the TPG directors, Bonderman “asked us about the different uses of the word ‘bollocks.’ We told him there were at least six different uses, with the most positive being ‘the dog’s bollocks.'”
O’Leary recalled “we needed to get rid of the Ryans, or at least downplay Tony and the rest of the Ryan influence, if we were going to seriously float the company on the London Stock Exchange. It was only a few years from the GPA mess, so Tony can’t float it. You have to take the Ryans down.”
