Friday, May 30, 2008

Carlyle Fattening Up on Defense Contractors

After lightening its defense portfolio the last few years, The Carlyle Group seems ready for another round of gorging on military contractors. They announced their interest in Filtronic, a British manufacturer of military microwave technology. Carlyle made a killing from two privatized government companies, U.S.I.S. and QinetiQ. They sold their interest in United Defense Industries for major gains. BAE purchased UDI in March 2005.

But recently the infamous private equity underwriter (PEU) dipped its proverbial toe back into bloody waters with its announced acquisition of giant government contractor Booz, Allen & Hamilton. The firm does billions in work for the Defense and intelligence arms of the federal government. Now the PEU is sniffing around Filtronic. Expect more as Carlyle aims to be a one stop shop for the government industrial monstrosity. Booz consultants can subtly steer Uncle Sam toward Carlyle sister company's products. Influence selling, it's a thing of beauty...