Monday, April 17, 2017

Booz Allen Issues Debt to Pay Sponsor Carlyle

SeekingAlpha reported:

Booz Allen Hamilton Holding Corporation (NYSE:BAH) announced the launch of $350M aggregate principal amount of unsecured senior notes by its wholly-owned subsidiary, Booz Allen Hamilton Inc.
Funds will be used for multiple purposes, including:

"repayment of a portion or all of the outstanding deferred payment obligation established in connection with the acquisition of Booz Allen by The Carlyle Group in 2008."
SEC filings show the deferred payment obligation at $158 million when established on May 15, 2008.  On December 11, 2009 BAH took on debt to repay Carlyle $100.4 million, $78 million of the deferred payment obligation plus $22.4 million in accrued interest.   The current amount owed Carlyle under the DPO is $81.3 million.

Booz paid Carlyle a one time $20 million for investment banking, financial advisory and other services.  It also pays Carlyle $1 million per year in advisory fees.

PEU affiliates have the honor of paying, paying and paying sponsors.  Carlyle loves cash, especially when the PEU notices early seismic economic shutters.