Thursday, August 9, 2007

Carlyle Hits Japanese Jackpot!

Private equity underwriter The Carlyle Group announced an IPO for Kito Corporation, a Japanese crane and hoist maker it took private in September of 2003. How did they do? After advancing their tender offer, company press releases indicate Carlyle got some 19 milion shares at 267 yen per share in the deal. Today they offered roughly one third of the Kito's shares on the Tokyo Stock Exchange for 400,000 yen per share.

The value of the original transaction was 5.2 billion yen for 90% of the company's shares. The IPO came in a 17.1 billion for 32% of Kito. Roughly one third of the original purchase price is 1.7 billion yen. This means Carlyle nailed a ten bagger in less than 4 years!

If Japan cut their capital gains tax rate like American President George Bush, Carlyle should pocket an extra 5% of their 15.4 billion yen in profits. The 77 million yen converts to a $650,000 savings. I'm sure the PEU boys at Carlyle will find better ways to spend that money than Uncle Sam. Yes, while low income teenage boys die of tooth abscesses the private equity boys keep their tax breaks. Even Democrat Chuck Shumer is fighting for their right to pocket more!