Bain Buys Into Philanthropic Shoemaker Toms

Aug 22 2014 | 5:02am ET

Toms, the canvas shoemaker best known for giving away a pair of shoes to a needy child for each it sells, has sold half of itself to private-equity firm Bain Capital.

The deal values the eight-year-old California company at $625 million. Toms founder Blake Mycoskie said that the partnership with Bain “will enable Toms to grow faster and give to more people in more ways than we could otherwise.”

While the deal between the private-equity giant and a philanthropically-minded shoemaker may seem odd, Toms has always been a for-profit company. “Blake found that for-profit and bottom-line focus didn’t have to be in conflict with for-good,” Bain’s Ryan Cotton told Bloomberg News.

Mycoskie remains half-owner of the company he founded. Half of the proceeds from the sale will go to launching a new fund backing socially-minded entrepreneurs—another effort that Bain will back, dollar for dollar.

In addition to shoes, Toms also sells eyeglasses—with a share of that profit going to help save or restore the eyesight of people in developing countries—and coffee, funding a week of clean water to someone in a coffee-growing country for each bag of beans it sells.

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