Thursday, April 1, 2010

Rushing to the Exit

The Carlyle Group and joint venture partner Robert L. Johnson share the selling spirit. The Daily Beast reported on Bob Johnson's financial struggles, which manifested in his selling the Charlotte Bobcats to Michael Jordan for a song. But the need for cash is wider than a BET made billionaire.

FT reported successful exits are the lure, dangled for "choosy and cash strapped investors." Given the roller coaster ride, exits have been few and far between until recently.

David Rubenstein, co-founder of the US-based Carlyle Group, says distributions from private equity exits to investors have fallen from an average of $15bn a quarter in 2004-07 to roughly $3bn a quarter in recent years.
Carlyle's late 20009-2010 exits, full or partial, include:

Insight Communications-equity sold to Crestview Partners & MidOcean Partners

Vought Aircraft-Carlyle received 30% of Triumph's stock

Kito-Carlyle sold 22% of share capital

Kbro-sale of $1 billion stake to Taiwan Mobile

China Pacific Life

Frontier Drilling


Financial Software and Systems Pvt Ltd

Kinder Morgan

AMC Entertainment

Wall Street Institute



Other affiliates going public include:

Booz Allen Hamilton
Cobalt Energy
Coresite Realty ($245.8 million)
China Forestry Holdings Co., Ltd.
Kaisa Group Holdings Ltd.
Concord Medical Services Holdings Ltd.

SS&C Technologies launched an IPO, however Carlyle held onto all its stock.
Niska Gas Storage LLC
Moncler (in a year or so)
Mill Digital Media (under consideration)
Freescale Semiconductor
AZ Electronic Materials

Claris Lifesciences

Carlyle is seeking a buyer (or exit) for:

ARINC (now an IPO)
United Components
Claris LifeSciences
FRS Global
Offshore Incorporations

What might they do with Carlyle's chunk of any windfall? Sandra Horbach says they're looking overseas for new investments. David Rubenstein echoed the call.

Let's hope some of Carlyle's proceeds go to Bob Johnson. President George W. Bush's billionaire community banker needs it. Might Uncle Sam provide a lifeline for Mr. Johnson? He's connected.

Carlyle's HD Supply plans to go public by 2014 with an "off the charts" ROI. That's despite a Moody's downgrade from B3 to Caa1.

Update 9-17-10:  Bloomberg noticed Carlyle's great cash in.

Update 1-21-11:   China Pacific looks to be a six bagger with $4.4 billion in profit.  Good thing Obama extended the Bush tax cuts, saving Carlyle $880 million in taxes.

Update 5-23-11:  Carlyle continues to monetize affiliates pre-IPO.  Freescale Semiconductor's IPO is expected this week.  Add SchoolNet, The Mill, H.C. Stark and Wesco Aircraft to the list,  But there's more.  Carlyle sold ManorCare's physical assets to a REIT for over $6 billion.  Moncler will conduct an IPO on the Italian exchange and may conduct a secondary offering on Brazil CVC.    Carlyle returned $13.9 billion to investors over the last five quarters (all of 2010 and 1st quarter 2011).  Carlyle's carry amount to roughly $3.5 billion.  That should rocket the DBD's up the Fortune Billionaire list.