Sunday, May 26, 2013

Carlyle's Latest Cash In

The Carlyle Group did not separate itself from its private equity underwriter (PEU) peers based on financial results for the first quarter of 2013.  Blackstone and Apollo Global Management's results showed large gains vs. a year ago.

PEU's big paydays come from monetizing affiliates.  In Q1 Carlyle realized 45 private equity deals for nearly $3 billion, an average of $66.4 million per deal.  That seems rather paltry for a firm expecting to make 30% annual returns on investment.

PEU's profit by selling their stake in publicly traded affiliates or private sale to another buyer, often a fellow PEU.   Q2 could have Carlyle flipping more affiliates.  Carlyle is currently shopping Coates Hire, an Australian firm which specializes in equipment rental.  Carlyle paid $1.5 billion for Coates and expects over $3 billion from its sale

Carlyle will sell 15 million shares of Wesco Aircraft for proceeds of $240 million.  It sold 7.5 million shares of affiliate SS&C at a price of $32.20 per share and its remaining 20.3 million Hertz shares for $23.62 apiece.  In addition Carlyle backed Chinese firm GDC filed for a $75 million IPO on NASDAQ.

Wesco - $240 million
SS&C - $241 million
Hertz - $480 million
GDC - $75 million

That's over $1 billion in stock sale proceeds.  Also, Carlyle plans to take General Lighting public in Saudi Arabia. 

Q2 also saw Carlyle's co-founders set up their personal cash-in of Carlyle Group stock, even as work to remake the world in their PEU image.

Update 5-29-13:  Add a 3.9 million share sale of Boston Private Financial Holdings stock by Carlyle affiliate BP Holdco and another $40 million goes into the Carlyle kitty.