Tuesday, November 30, 2010

Carlyle Shifts Gears: Sells UCI to Rank

The Carlyle Group slammed the brakes on UCI's upcoming independent public offering, instead selling the auto parts maker to New Zealand's Rank Group for $375 million.  NZHerald reported:

Carlyle bought about 90 per cent of UCI International in 2003 for some $800 million in cash. 
Don't cry for Carlyle.  UCI sold off three divisions in 2006.  Carlyle likely got their initial investment and more, via their signature strategies, management fees ($2 million per year) and  a whopping special dividend ($96 per share or $35.3 million in January 2007).

Funny, their 2007 10-K posted a different dividend amount:

In December 2006, we paid a special cash dividend of $35,305 per share on our common stock. Prior to that time, we did not pay dividends since the date of our incorporation on April 16, 2003.
This points to a major stock split.  How else did UCI change under 8 years of Carlyle ownership?  It turned Chinese.

Globalist Carlyle ramped up from exporting jobs, by exporting the whole company (recall three divisions were sold in 2006).  SEC filings show:

UCI had 6,900 employees as of December 31, 2004. In 2004, our net sales were $1,026.7 million

As of December 31, 2009, we had approximately 4,350 employees.  In 2009, our net sales were $885 million.

As for the state of reporting, Carlyle didn't pay $800 million in cash for UCI.  SEC filings show:

The purchase price paid was $808 million, plus transaction fees. The Acquisition was financed through a combination of debt and $260 million in cash.

I find it somewhat reassuring that Greed and Rank got together on this deal.  Who's next in Carlyle's Great Cash-In?

Update 7-7-11:  Rank builds its auto parts empire on a mountain of debt.

Update 3-28-16:  UCI bonds near default with the postponement of a $17.3 million interest payment

Update 6-11-16:  UCI could not bear the debt taken on with Carlyle's monetization and declared bankruptcy