When Carlyle Group LP orchestrated a $4.9 billion buyout of DuPont Co.’s auto-paint business in 2013, competitors said the private equity firm overpaid. Three years later, Carlyle has reaped its second-biggest profit ever on the deal.Carlyle happened to own a growing multi-shop operator, Service King. When Carlyle purchased Service King it operated 47 auto body repair centers. In 2014 when it did a deal with Blackstone Service King had 177 auto body shops. Carlyle steered all of Service King's business to Axalta during their ownership of both companies. A OneCarlyle case study stated:
The asset manager sold on Tuesday its remaining stake in Axalta Coating Systems Ltd., previously known as DuPont Performance Coatings. The $1.35 billion that Washington-based Carlyle plowed into the deal grew to $5.8 billion, according to regulatory filings, through a series of stock sales starting last year.
Axalta CEO Charlie Shaver refocused the company’s auto-refinishing unit to win business from growing multi-shop operators, rather than individual car shops.
The Carlyle Group purchased a UK based auto repair chain, Nationwide Accident Repair Services (NARS), in early 2015. The NARS network now stands at 124 sites following its most recent acquisition.
- Entered into an enterprise-wide supply partnership with Axalta Coating Systems (a Carlyle Partners V portfolio company), a global provider of liquid and powder coatings in the automotive industry
Carlyle may be skilled in reading which industries are ready to turn around, but I believe they steer business between affiliates to accelerate changes.
Carlyle got in and out of Landmark Aviation several times. The PEU is in a position to steer affiliate private jet needs to Landmark during periods of Carlyle ownership and guide it elsewhere later should it suit. Carlyle's most recent Landmark sale garnered over $2 billion.
Bloomberg missed Carlyle's first roundtrip on Landmark Aviation when it sold the company to Dubai Aerospace for $1.8 billion. Carlyle had the connections to keep the deal on the down low between the Dubai Ports brouhaha and the NASDAQ-Bourse fiasco.
On the second Landmark sale Carlyle used someone with connections. Ironically it's an attorney who likes to race cars. I wonder if he got any free Axalta paint from the deal.
Update 8-16-16: Carlyle announced a deal to buy mobile security company, NetMotion, which targets large enterprise customers. Carlyle owns more than a handful of those.