Monday, March 29, 2010

Carlyle Group's Tea Leaves Read Middle East Lighting

The Carlyle Group announced its Middle East/North Africa (MENA) fund acquired a 30% of General Lighting Company, Saudi Arabia's largest lighting fixtures manufacturer and supplier. The WSJ interviewed Walid Musallam, managing director and head of Carlyle’s MENA operations. He said:

The company is a full solution provider and market leader in the manufacturing and distribution of lighting fixtures. It has a market share significantly larger than its competitors. It is well run and has potential for growth both inside and outside Saudi Arabia.
Walid mentioned Egypt as a potential area for growth. Will President Hosni Mubarak use any proceeds from his $50 million U.S. taxpayer funded endowment on GLC lighting? Carlyle's Musallam went on to say:

We are delighted to have made our first investment in Saudi Arabia and second in the Mena region in just three months. We look forward to supporting GLC in achieving its expansion ambitions.
Don't let GLC's CEO talk with his Vought Aircraft Industries counterpart. Elmer Doty repeatedly cited liquidity and capital crunches as causes of Vought's gunking up Boeing's Dreamliner production line.

Another article cited the private equity underwriter's (PEU's) global footprint:

Carlyle has made 118 investments in Asia to date, including 45 in China and 22 in India.
Indian affiliate Repco Home Finance received $130 million in Overseas Private Investment Corporation loans

Carlyle knows how to read and profit handsomely from signs. It acquired a Brazilian tour operator with World Cup soccer and the Summer Olympics but years away.

Why a Middle East lighting company? Will demand come from new construction or destruction? Either way, Carlyle's PEU tea leaves read lighting.

Update: Carlyle Group co-founder Bill Conway met with Jordan's King Abdullah on investing in his country. Might it involve cheap Palestinian labor and Obama public-private partnerships (PPP's)?