At Dlj, Will Lbo Lightning Strike Twice?

A second buyout fund aims for the success of the first

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By Phillip L. Zweig

December 23, 1996 at 5:00 AM UTC

This article is for subscribers only.

In February, 1994, Victor M.G. Chaltiel left his post as chairman, president, and CEO of home-health-care provider Total Pharmaceutical Care following the sale of the Torrance (Calif.) company. Minutes after the story hit the wires, a merchant banker at Donaldson, Lufkin & Jenrette Securities Corp., TPC's investment banking firm, phoned to propose they team up on a brand-new venture.

Chaltiel and DLJ's merchant banking unit soon crafted a deal to acquire a majority stake in a Tenet Healthcare Corp. kidney dialysis unit, which Tenet was shedding in a restructuring. Over the next two years, DLJ helped the new company, Total Renal Care Holdings Inc., snap up 71 treatment facilities, took it public at $15.50 a share, led two secondary stock issues, and participated in a $400 million loan. DLJ's net annual return on its original $10.5 million investment in TRC: a robust 386%.