Sunday, March 21, 2010

Carlyle Group Ready to Flip ARINC reported on ARINC, an affiliate of the Carlyle Group. When Carlyle purchased the company in 2007, ARINC's Standard & Poors rating fell to "speculative grade." That was before the financial meltdown. The article pointed toward Carlyle's intentions:

"I came in 10 years ago," said ARINC CEO John Belcher. "Since then we took the company from $200 million (in annual revenue) to about $1.2 to $1.3 billion. Carlyle will look at a company like ours, will buy a company, turn it around and then want to sell it. That's where we are right now; I really couldn't say much more than that."

According to recent wire reports, Goldman Sachs has been tasked with finding suitable bidders for the sale, which could reach $1 billion.
Under Carlyle's management ARINC had big successes and failures. They bungled a Russian helicopter deal for Iraq. Nevertheless, Uncle Sam has been good to ARINC.

The Carlyle Group is renowned for its affiliates suckling on the federal teat. It's also a global player. ARINC's big success came in Egypt.

The article nailed ARINC's capabilities, nurtured by Carlyle:

ARINC also has a business jet division.
"Anything you need - we now have over 2,100 business jets around the world that are part of this service," said Belcher.
There's seemingly no end to what ARINC is involved with including railways, port security, military/government communications, network connectivity, and information technology.

But it's time for ARINC to leave Carlyle's distressed deal list (prepared by Moody's) and return some green. This one should go the opposite of Willcom, which cratered before Carlyle could sell the firm. ARINC has an order book, much of it supplied by Uncle Sam.

Update 4-6-12:  Carlyle may have to monetize ARINC's government consulting division before it can cash in the rest of the firm.  At least that's Reuter's take.