1965

3610 Oriole Drive Columbus, IN 47203

Two of our classmates are combining their talents in a highly successful business venture. Their organization, Welsh, Carson, Anderson & Stowe, is using experience and creativity to join together the rapidlymoving worlds of finance and information processing.

Russ Carson, an economics major at Dartmouth, joined Citicorp Venture Capital shortly after receiving his M.B.A. from Columbia in 1967. He was serving as chief executive officer of that firm when he left to establish WCAS in 1978. He says that, although the initial projects of the new organization involved equity investments in small growth companies, the business quickly evolved toward much larger transactions and required the use of what is called a leveraged buyout or LBO. Such an acquisition technique matches a relatively small investment in the purchased company with a large amount of debt financing. LBOs are commonly used in situations where significant assets are available to serve as loan collateral, but a recent Forbes article describes New York-based WCAS as the pioneer and leading expert in using such an approach with an established information company. Russ says, "When we came up with the concept, we had difficulty convincing institutional investors our kind of acquisition could quickly repay its debt obligation. We now can rely on a proven record of selecting and building companies and this has allowed us to become one of the largest firms in the United States providing private equity capital." WCAS is presently managing five limited partnerships with a combined funding of more than $500 million.

Kip Moore, who never knew Russ while we were in Hanover, was recruited by the firm in 1982 for his strong background in computer science and business. As an undergraduate math major, Kip became involved in the development of computer timesharing at Dartmouth and was asked to continue his work by General Electric following graduation. He received his Ph.D. in computer science from the University of Michigan in 1971, spent nearly two years teaching in European universities, and became a member of the computer science department at Cornell. In 1975, Kip says he decided to join the "real world" and was named a vice president of Automatic Data Processing, Inc., one of the nation's largest suppliers of computing services. In his current ole as one of eight WCAS general partners, Kip says, "The initial step we have to take in any acquisition is a solid analysis of a company's management team and the service being performed. We then set out to build a supportive relationship that will combine the talents of existing management with the diverse technical, financial, and managerial skills of our general partners."

The last ten years have produced a long series of success stories for the approach followed by WCAS. Metromail Corporation, a provider of services for direct-mail marketing, was purchased in 1980 for $30 million and sold in 1987 for $280 million. Fiserv Inc., an on-line data processing service for financial institutions, has seen the price of its shares increase more than ten times during the period of WCAS participation. Sales of Genicom Corporation, a supplier of computer printers for business applications, have increased from $137 million in 1984 to a rate of more than $330 million recently. The ultimate accomplishment, in most of our eyes, however, came with the addition of a new WCAS institutional investor early last year. A portion of the Dartmouth College endowment was invested through one of the WCAS partnerships. This may mean that Russ and Kip have now become the only members of our class to receive more money from the Alumni Fund than they have ever been asked to give.