How Mitt Romney's Firm Tried — And Failed — To Build A Paper Empire

http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt-romneys-firm-tried-and-failed-to-build-a-paper-empire
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The story of how Bain Capital tried — and failed — to build a paper empire starts with an ordinary legal pad. Yellow-lined paper, wide margins. The most innocuous looking thing in the world. The company that makes it has been around for more than 100 years. Its name is as boring as its product: American Pad and Paper. Ampad for short.

Private equity works sort of like flipping houses. You buy a house cheap, fix it up nice, and sell it for a profit. In the process, you make the whole neighborhood better. That's the idea.

"We were highly leveraged as a company," says Russell Gard, the guy who Bain brought in to run the company. "Like, squeaky leveraged. We were tight."


Around this time, office superstores were popping up everywhere, and Bain wanted to buy more companies to build Ampad into an all-purpose paper supplier for the big chains.

So Bain bought a hanging file folder company called SCM in Marion, Indiana.