Tuesday, January 1, 2013

Carlyle Leads Bet on Duff & Phelps

The Carlyle Group leads a consortium of private equity underwriters (PEU's) in taking Duff & Phelps private.  Duff &Phelps last went public in 2007.  Carlyle's Olivier Sarkozy (of Olsen Twin fame) stated why the PEU consortium paid a 20% premium relative to Duff & Phelps recent stock prices.

"Regulatory demands, implementation of new accounting policies and requirements for increased corporate disclosure and third party validation provide significant growth opportunities for Duff & Phelps core products and services. We will harness Carlyle's and Stone Point's global networks while leveraging Duff & Phelps preeminent brand to foster growth in new geographies. Additionally, we believe the involvement of Pictet and Edmond de Rothschild Group will support the Company's initiatives to enhance its international presence and expand its Limited Partner client base. We are excited to work with Noah and his management team on this opportunity."
Carlyle et al can send affiliates to Duff & Phelps for the services cited.  Rothschild recently advised Carlyle regarding LifeCare Hospitals.  Carlyle took LifeCare into a Rothschild recommended bankruptcy.  Duff & Phelps has a restructuring division.  Might business soar given the billions in PEU refinancing coming in 2013 and 2014?

Another Carlyle affiliate, Sandler O'Neill, advised the PEU consortium on Duff & Phelps.  Might Duff & Phelps tag team with Sandler on future PEU refinancings and/or sales.  They could partner in a fee generating explosion, benefiting Carlyle.

Centerview Partners, with Bob Rubin, advised Duff & Phelps on the deal.

Below are items of historical note on Duff & Phelps website:

Valuation advisor for the U.S. Congressional Oversight Committee's Troubled Asset Relief Program (TARP)
Financial advisor to the Examiner in the Lehman Brother's bankruptcy
Expert Witness regarding the Madoff Estate

Carlyle knows leverage in its many forms.  How will The Carlyle Group lever Duff & Phelps? What new bailout might Duff & Phelps support?  What huge bankruptcy will need their services.  What monster fraud will need untangling?