Sunday, October 27, 2013

Carlyle Does Complicated for Breakfast

Missoula City Mayor John Engen is taking a hard run at buying Mountain Water from its private equity owner The Carlyle Group.  Carlyle purchased Park Water, the owner of Mountain Water, on December 20, 2011.  Less than two years later Mayor Engen courts Mountain Water with serious ardor and a potential condemnation order.

The Missoulian stated Mountain Water's extensive holdings complicate the deal.  The Carlyle Group birthed "the complicated" in business.  They'll use that to obfuscate, deflect and deny any fair offer for Mountain Water. 

Mountain Water's John Kappes detailed an extensive list of the company's holdings and assets.  After Carlyle's Chinese forestry and fertilizer assets evaporated into smog filled air, rest assured The Carlyle Group did an extensive valuation of Park Water's numerous assets, including those of Mountain Water.   

Ideally, Engen and Carlyle would sit down with that valuation and mark things up or down.  That's far too simple and wouldn't get the greed/leverage boys the millions they covet. 

As for the employees how much of a stake do they hold in Mountain Water?  I expect it to be none or infinitesimal.

Carlyle will seek a premium to split off Mountain from the rest of Park Water.  I expect they'll press for a multiple of their original equity investment in Park.  How much might Carlyle's DBD's and Robert Dove make on holding Mountain Water two years?