Rice to step down as CD&R chairman

Joseph Rice, a pioneer of the buyout model who will leave the firm in June, earlier this year said at an industry conference that CD&R would likely never go public like several of its peers.

Buyout pioneer Joseph Rice will step down from the role of chairman at Clayton, Dubilier & Rice, the firm he launched alongside Marty Dubilier and Eugene Clayton in 1978. 

Rice will vacate the position in June, the firm said. Although it is unclear who will replace Rice as chairman, one likely candidate is the firm's president and chief executive officer Donald Gogel.  

Gogel notified investors of Rice’s departure in a letter, which The New York Times published in its entirety. Rice will maintain his office at the firm’s 375 Park Avenue headquarters in New York, Gogel said in the letter. 

After he steps down, Rice will dedicate a “significant” amount of time to his role as a founding trustee at the Private Capital Research Institute, which has been developing a global private equity database using firms’ fund and transaction data since 2010. 

Joseph Rice

Rice was an early proponent of the leveraged buyout model, eventually leading the firm in several high-profile deals, including the acquisitions of rental car company Hertz, Goodrich Tire Company and Remington Arms. Before launching CD&R, Rice was a founder of management buyout firm Gibbons, Green & Rice. He also worked at investment banking firm Laird Incorporated and practiced law at Sullivan & Cromwell. 

Earlier this year, Rice spoke at Columbia University’s private equity conference, where he indicated that CD&R would not be joining peers like The Carlyle Group, The Blackstone Group or Apollo Global Management in going public, a move that would allow the founders to realise value after years of growing the firm. 

“Running a public company is not necessarily an easy thing to do. The government has a way of, if you use the public markets, wanting to regulate your business. I think also, being a public company doesn’t really fit with my concept of what this business is about as we conduct it. So it’s really never going to happen for us,” he said. 

CD&R has offices in New York and London, and has invested more than $80 billion in 51 companies since its inception. The firm’s last fund, which raised $5 billion in 2008, was generating a 1.14x multiple and 13.1 percent internal rate of return as of 30 September, according to New York City Police Pension Fund documents.