Wednesday, September 5, 2007

Carlyle Goes After Australian Traffic Management Firm

The Carlyle Group wants Coates Hire Ltd. to join their private equity family. Coates Hire bills itself as Australia's largest equipment hire company with over 120 years experience in industry, supplying to a wide variety of markets including Engineering and Building Construction & Maintenance, Mining & Resources, Manufacturing, Government, and Events. With over 200 branches and satellite locations, our own maintenance and transport capability, Coates is well positioned to satisfy the equipment hire needs of an ever increasing customer base.

Carlyle has the connections to grow that customer base worldwide, but especially through picking up federal and state government business. A look at Coates subsidiaries shows one competency Carlyle's infrastructure group might like to have, traffic management.

Texas is currently ground zero for the privatization of roads. TxDOT wants Congress to pass a bill allowing the state to buy sections of interstate highways for "privitization". Infrastructure companies would recoup their investment by charing tolls. An Australian private equity firm, Macquarie was first into this profitable niche with four U.S. projects, including the Indiana Toll Road. But Carlyle won't be far behind, especially given their political connections.

Mary Peters and her senior staff at the U.S. Department of Transportation clearly favor privitization. However, if Carlyle really wants Coates Hire in their PEU family, they'll need to increase the bid. If an Australian PEU can own American roads, an American PEU can own an Australian road builder. And the world of high dollar intrigue goes on...